| Debunking financial urban myths |
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Myth No. 4: Boycotting
a few gasoline brands brings gas prices down. Poor Exxon
and Mobil. They often show up as the bad guys in a mass e-mail urging
Americans to avoid their pumps on a particular day.
Its easy-to-understand language makes the plea plausible.
The trouble lies in the fact it's too simple -- and economics doesn't
work that way. For starters, gasoline is what's known as a fungible
commodity -- if one company has an oversupply, it sells it to a
competitor. No matter who you buy from, the basic supply numbers
remain the same.
Furthermore, prices at all the nonboycotted outlets
would rise, thanks to the temporarily limited supply and increased
demand, making the original prices look cheap by comparison, according
to Snopes.com.
Besides, the industry is too large for a boycott
of two companies to make a dent, says Stephen Ciccone, University
of New Hampshire assistant professor of finance.
Myth No. 5: It's better if you don't sign
the back of your credit card. Some well-meaning pigeon decided
one day this would protect him from identify theft.
Unfortunately, in the real world, it only "protects"
you from having the merchant accept your payment at the check-out
counter, says Mills. Not to mention an unsigned card in the hands
of fraudsters is much easier to use for unauthorized purchases.
They can just sign the card themselves and their signature will
always match the receipt signature.
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