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

Multiple Choice Questions

1. How do some smaller exchanges double their money?
(a) Allowing margin play.
(b) Switching prices at the last minute.
(c) Taking out too much taxes.
(d) Getting different customers to buy and sell at the same time.

2. What can a trader do by applying rules to a pattern?
(a) Decide if it is a bear market.
(b) Decide whether to come to work.
(c) Decide when to buy or sell.
(d) Decide if it is a bull market.

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

4. How much money does Livingston make when he first comes back from St. Louis?
(a) He makes a moderate amount of money.
(b) He gains slowly, but steadily.
(c) He loses money.
(d) He makes a huge amount of money.

5. Why does it take Livingston so long to understand how to trade?
(a) He hates to study hard.
(b) He is too confident in his own methods.
(c) He won't listen to his mentor.
(d) He enjoys it so much he doesn't pay attention.

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

7. What does Livingston want to do when he sees the market rallying?
(a) Switch to bonds.
(b) Buy a lot of stock.
(c) Not do anything.
(d) Prove it's only temporary.

8. When is there a financial panic in 1907?
(a) June.
(b) August.
(c) October.
(d) April.

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

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

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

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

13. What does Livingston do after he sold all the stock in Union Pacific and after the earthquake?
(a) Went into index funds.
(b) Started buying Union Pacific again.
(c) Went into commodoties.
(d) Bought a lot of mutual funds.

14. What has he regretted ignoring in the past?
(a) Not liking a company.
(b) Stocks going down.
(c) His mentor's advice.
(d) Strong hunches.

15. What does Livingston discuss at the beginning of this chapter about stocks?
(a) How it's all random.
(b) Various patterns.
(c) How stocks come in all sizes.
(d) How one stock is good and one isn't.

Short Answer Questions

1. Why is Livingston having a hard time increasing his money?

2. Why do the bucket shops begin banning Livingston?

3. What does experience give a successful stock trader?

4. What does Roberts suggest to Livingston?

5. What does Livingston complain about Wall Street?

(see the answer keys)

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