Question introductive<p>Consider the following structured note offered by Baywhite Financial</p> </br> &emsp; <table style="width:80%;text-align:left"> <caption>Baywhite Financial LLC 80% Principal Protected Structured Note</caption> <tr> <th>Description:</th> <td>The Baywhite Financial LLC 80% Principal Protected Structured Note (“the Note”) is linked to the performance of the S&P 500 Health Care Select Sector Index (SIXV).</td> </tr> <tr> <th>Issuer:</th> <td>Baywhite Financial LLC</td> </tr> <tr> <th>Start Date:</th> <td>[Today]</td> </tr> <tr> <th>Maturity Date:</th> <td>[Six months from Start Date]</td> </tr> <tr> <th>Issuance Price:</th> <td>102% of Face Value</td> </tr> <tr> <th>Face Value</th> <td>Sold in a minimum denomination of USD1,000 and multiple units thereo</td> </tr> <tr><th>Payment at Maturity:</th> <td>At maturity, you will receive a cash payment, for each USD1,000 principal amount note, of USD800 plus the Additional Amount, which may be zero.</td> </tr> <tr><th>Partial Principal Protection Percentage:</th> <td>80% Principal Protection (20% Principal at Risk)</td> </tr> <tr><th>Additional Amount:</th> <td>At maturity, you will receive the greater of 100% of the returns on the S&P 500 Health Care Select Sector Index (SIXV) in excess of 5% above the current spot price of the SIXV or zero</td> </tr> </table> <p>As a financial analyst for a wealth management advisory firm, you have been tasked with comparing the features of the Baywhite Financial LLC Structured Note with those of a similar exchange-traded, stand-alone derivative instrument alternative in order to make a recommendation to the firm’s clients. </p>

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