Tulane, Inc. (based in Louisiana), is considering issuing a 20-year Swiss francdenominated bond. The

proceeds are to be converted to British pounds to support the firms British operations. Tulane, Inc., has no Swiss operations but prefers to issue the bond in francs rather than pounds because the coupon rate is 2 percentage points lower. Explain the risk involved in this strategy. Do you think the risk here is greater or

less than it would be if the bond proceeds were used to finance U.S. operations? Why?