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

Multiple Choice Questions

1. According to Livingston why should no one trade every day?
(a) It is too tiring.
(b) It cost too much money.
(c) It's not good for the soul.
(d) The excitement leads to mistakes.

2. What does Livingston do when he proves himself right about the market in Chapter IX?
(a) Buys stock.
(b) Sells high end stock and buys low end stock.
(c) Holds steady.
(d) Sells stock.

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

4. What does Livingston say is impossible to catch?
(a) Two stocks related moving in different directions.
(b) A stock on the rise.
(c) Tiny fluctuations of the market.
(d) A stock just being offered.

5. What should one do in a bull market?
(a) Buy one week, sell the next.
(b) Stick with index funds.
(c) Wait and see.
(d) Buy stock.

6. Why does Livingston return to Boston?
(a) He's broke and frustrated.
(b) He wants to open a bucket shop.
(c) His mother is ill.
(d) He hates the traffic in New York.

7. What does Livingston say one must be in order to be a good trader?
(a) Intuitive.
(b) Objective and neutral.
(c) Subjective.
(d) Very smart and well educated.

8. What does Roberts suggest to Livingston?
(a) Opening a bucket shop himself.
(b) Betting on corn and wheat.
(c) Going back to school.
(d) Smaller, alternate exchanges.

9. What does Livingston say will happen in a stock or commodity if a surprise event occurs?
(a) It will always go down.
(b) It will always go up.
(c) It will move in the direction of the market.
(d) It will always stay the same.

10. How much regulation is there in the stock market during Livingston's era?
(a) Very little regulation.
(b) It has many rules.
(c) There is a moderate amount.
(d) The SDIC is watching everyone constantly.

11. How does Livingston portray himself to the small exchanges?
(a) Someone who has lost a lot of money on Wall Street.
(b) Someone who is very, very wealthy.
(c) Someone who is very knowledgeable.
(d) Someone who has never thought about stocks.

12. What is happening to wheat prices when Livingston is trading it?
(a) It's declining.
(b) It's staying the same.
(c) It's moving up and down everyday.
(d) It's going up.

13. What does the phrase "go short" mean?
(a) To wait a short time to sell.
(b) To buy stock that's been on the market a short time.
(c) To sell stock.
(d) To buy any stock within 30 days.

14. What does Livingston figure out he has to do to make a lot of money?
(a) Spread his money around.
(b) Keep his money riding longer.
(c) Trade on broad principles.
(d) Play one stock consistently.

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

Short Answer Questions

1. What does Livingston want to do when he sees the market rallying?

2. When is there a financial panic in 1907?

3. What does Livingston conclude when Union Pacific announces a dividend?

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

5. What concerns Livingston in 1906?

(see the answer keys)

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