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

Multiple Choice Questions

1. What does Livingston do to retaliate against the insiders?
(a) Tells all his friends to sell.
(b) Sells a bunch of the parent company stock.
(c) Buys all the low priced shares.
(d) Tells the newspaper it's going under.

2. How many people held most of the stock in Consolidated Stove?
(a) Ten.
(b) Three.
(c) One.
(d) Two.

3. When is a good time to sell a stock?
(a) When it is dropping.
(b) When it reaches its top price.
(c) When the price is rising.
(d) When others are selling.

4. When Livingston is looking at the price of Tropical Trading what is the market doing?
(a) Going up.
(b) Staying the same.
(c) Fluctuating wildly.
(d) Going down.

5. How does Livingston feel about selling stocks on a payment plan and stock splits?
(a) He thinks you should do them but on a limited basis.
(b) He thinks they're a great idea.
(c) He warns against this.
(d) He has no opinion.

6. Why does Livingston say traders are often vilified in the press and by other traders?
(a) When they corner a market.
(b) When they sell short and the price drops.
(c) When they make too much money.
(d) When they hold onto food crops.

7. What did coffee brokers tell Congress about Livingston?
(a) He was selling too low.
(b) He bought coffee from Germany.
(c) He was intimidating them.
(d) He was trying to corner the market.

8. Why does Livingston say that after 25 years playing the market, it has become more difficult?
(a) There's been a large increase in the number of stocks.
(b) Too many new laws.
(c) There are too many brokers.
(d) The stocks have become too expensive.

9. What does everyone finally think about Tropical Trading?
(a) The parent company is in trouble.
(b) The stock can't be manipulated.
(c) The insiders are dishonest.
(d) The stock is solid.

10. What does Livingston wonder when he is flat broke again?
(a) If his brother has some money to lend him.
(b) How he can make his money back.
(c) Whether he should switch to a different work.
(d) How he made so many mistakes.

11. What does Williamson agree to allow Livingston to do?
(a) Open an account with him.
(b) Manipulate the price of cotton.
(c) He gives him another stake.
(d) Buy 500 shares of one stock.

12. What does Livingston say a trader needs to make a good decision?
(a) To have good instincts.
(b) To work for a good brokerage firm.
(c) To know a stock really well.
(d) To have a lot of money backing him.

13. What does Livingston say he has to do with a strong urge?
(a) Wait and see.
(b) Study the situation before doing anything.
(c) He never has strong urges.
(d) Take action.

14. For what was the famous stock manipulator most known?
(a) Crashing the market one November.
(b) Causing worthless stock to be bought at outrageous prices.
(c) Manipulation of U.S. Steel stock prices.
(d) Manipulation of Bethleham Steel.

15. What kind of regulation is enacted during war time?
(a) No buying of government bonds.
(b) No buying of ammunition companies.
(c) No selling off defense stock.
(d) No profiteering in war necessities.

Short Answer Questions

1. What does Livingston say about a drop in a stock price?

2. What does Livingston warn about in the beginning of Chapter XV?

3. What does Livingston think the purpose of split stocks is?

4. What does Livingston suggest is the reason for urges?

5. What is one of the main problems of people paying you to do something on the market?

(see the answer keys)

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