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

Multiple Choice Questions

1. What does Livingston decide to buy next?
(a) He goes into oil stock.
(b) He decides to corner the market in cotton.
(c) He moves back to high tech stock.
(d) He decides to buy soy beans.

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

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

4. What does the pattern ignore that can create a problem?
(a) Political ramifications.
(b) Brand new public offerings.
(c) Underlying conditions.
(d) What time of year it is.

5. What does Livingston complain about Wall Street?
(a) How slow trades are.
(b) How everyone is unfriendly.
(c) How the market goes up and down too much.
(d) How much money he lost.

6. On a rising market what should each trade be?
(a) Lower than the last one.
(b) The average of all trades.
(c) The same as the last one.
(d) Higher than the last one.

7. As the market slides, what signs are showing in other financial institutions?
(a) The FDIC is in the red.
(b) The government has taken out more bonds.
(c) Average wages have dropped.
(d) Banks are being affected.

8. 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) Let a financial advisor handle your deals.
(d) Stay in for the long haul.

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(a) He had withdrawn from the market.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

10. What does Livingston think is his best guide to trading?
(a) Standard and Poor's index of stock.
(b) What happens in Washington D.C.
(c) Himself.
(d) The Fortune 500.

11. Why does Livingston take his profit out so fast?
(a) He has to support his family.
(b) He fears reversal.
(c) He has a problem with cash flow.
(d) He needs the money.

12. What happens when the market falls steeply in 1906?
(a) It earns Livingston and his house a lot of money.
(b) There is a depression.
(c) The government takes over the market.
(d) The banks collapse.

13. How does he start out selling Union Pacific?
(a) Slowly at first.
(b) All at once.
(c) Shares every other week.
(d) He talks to the brokage manager.

14. What do some people claim about a newspaper article that helped Livingston?
(a) His wife wrote it.
(b) He engineered it.
(c) His brother wrote it.
(d) The newspaper interviewed him for it.

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

Short Answer Questions

1. What type of time is the trading at a bucket shop?

2. What can a trader do by applying rules to a pattern?

3. Why did Livingston refuse the offer of partnership with Percy?

4. When does a trader err when trading?

5. How old was Livingston when he made his first $1000?

(see the answer keys)

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