This image illustrates the composition of a structured note issued by a bank with a $1,000 investment amount. The structured note is divided into two main components:

1. Zero-Coupon Bond: This component occupies the majority of the structured note's value. A zero-coupon bond is purchased at a discount and grows to $1,000 over time, ensuring that the principal is preserved at maturity. This bond provides the capital protection aspect of the structured note.

2. Options: The remaining portion of the structured note is allocated to options. These options provide the potential for enhanced returns based on the performance of an underlying asset (e.g., an index, stock, or commodity). The options component enables the structured note to generate returns beyond the principal, depending on how the underlying asset performs.

Together, these components allow a structured note to offer a combination of capital protection and the potential for market-linked returns, making it a flexible investment instrument with customizable risk and return profiles.