You are the new CFO of a multinational soft drink company. Currently, you are assisting your board of directors in evaluating the company's pension fund strategy. Specifically, the board is considering investing in the following structured products: (1) equity-linked notes (ELNs), and (2) commodity-linked bonds.

a. Briefly explain how these two structure products work and how they differ from a traditional debt security.

b. The company generates substantial revenues in Japanese yen subsequent to the introduction of its soft drink in Japan, and the board expects that the Japanese yen will appreciate against U.S. dollars in the next six months. Consequently, the board is also considering investing in a dual currency bond.

i. What is a dual currency bond? Briefly describe the principal and coupon payments of this instrument.

ii. Why might a dual currency bond trade at a premium over an otherwise identical single currency bond?

iii. If the board is correct and the Japanese yen appreciates against the U.S. dollar during the life of the structured security, what would be the impact on the value of the dual currency bond?