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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. Why should a trader start with a small trade?
(a) To see what others are doing.
(b) To see if it's going in the right direction.
(c) To find out if the stock is viable.
(d) So he'll lose less money.

2. Why does Livingston want to sell Union Pacific?
(a) He has a strong hunch.
(b) He never travels by train.
(c) They've been going down.
(d) He doesn't like the owner.

3. What is Livingston's job at a bucket shop?
(a) Runner.
(b) Stock broker.
(c) Trader.
(d) Quotation boy.

4. What did Livingston decide to look at when thinking about what to buy or sell?
(a) The ten best stocks.
(b) Mutual funds.
(c) The overall market.
(d) Index funds.

5. How old was Livingston when he made his first $1000?
(a) 15.
(b) 17.
(c) 21.
(d) 19.

6. Why can bets be carefully timed in bucket shops?
(a) There's less people betting.
(b) There's only three stocks involved.
(c) It's carefully controlled by the government.
(d) They can be bought and sold instantly.

7. What happens to Livingston when he takes Percy's advice?
(a) He loses almost everything he has.
(b) He doubles his money.
(c) He breaks even.
(d) He didn't take Percy's advice.

8. What is affected the most by timing on Wall Street?
(a) Large trades.
(b) Index funds.
(c) Bonds.
(d) Small trades.

9. Why did Livingston stop in New Haven on his way to New York?
(a) To take a job.
(b) To see his brother.
(c) To bet in a bucket shop.
(d) To see his mother.

10. What's the difference between working on the stock exchange and the bucket shops?
(a) Bucket shops require more money.
(b) In bucket shops you only bet on a stock; in Wall Street you buy it.
(c) Bucket shops are run by the mob.
(d) Wall Street requires you to wear a suit and tie.

11. What do the small shops agree Livingston can do?
(a) Trade on the prices quoted.
(b) Open a very large account.
(c) Buy and sell at the same time.
(d) Buy on margin.

12. What should one decide to do in order to make money?
(a) Sell when you need money.
(b) Hold on to the stock until it starts to drop.
(c) Stay in for the long haul.
(d) Let a financial advisor handle your deals.

13. What has happened to Percy recently in the market?
(a) He lost millions.
(b) He caused the market to go into a slide.
(c) He made millions.
(d) He had withdrawn from the market.

14. How does Livingston play on the market when he returns from St. Louis?
(a) Carelessly.
(b) Cautiously.
(c) Confidently.
(d) Frantically.

15. Who convinces Livingston that Union Pacific is manipulating him?
(a) The branch manager.
(b) His mentor.
(c) His wife.
(d) His best friend.

Short Answer Questions

1. What does Livingston believe about the cotton market when he and Percy are discussing it?

2. What concerns Livingston in 1906?

3. When can one only sell stock?

4. What does Livingston discuss at the beginning of this chapter about stocks?

5. What does Livingston figure out he has to do to make a lot of money?

(see the answer keys)

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