Q: How did you come up with the margin account of $194,546 on Slide 31?

A: Mr. Schumacher reported the existence of the margin account and the amount he owes in Note 2 to his personal financial statement. He then reported the net value of the margin account in the presentation of assets on his personal financial statement.

The margin account information is Mr. Schumacher’s declaration of the fact that he has pledged marketable securities held in the account as loan collateral to his brokerage house as part of establishing a margin account. He uses the margin account to finance part of his securities purchases through the brokerage allowing him to use debt to leverage his position.

Course overview:  Global Cash Flow