In June 1999, Charles Schwab offered investors an Equity-linked Certificate of Deposit (CD). This product offered:

i. A guaranteed minimum repayment of invested amount at the end of 5 years

ii. plus, 90% of the simple appreciation in the S&P500 index over that time (during the 5 years from investment) on the invested amount, should the index appreciate.

In other words, in addition to preserving the principal invested, this product allows the investor to participate in any appreciation of the stock market in the next 5 years, without penalizing her for any market downturn. Break this product down in terms of a portfolio of lending and options. Put another way, identify what kind of (and how many) options are embedded in this product.