Houston

Definition

Houston is a major city in Texas, known for its significant contributions to the energy sector and international trade. It is a key hub for financial activities, including risk management and exchange rates.

5 Must Know Facts For Your Next Test

1. Houston's economy is heavily influenced by the energy sector, making it sensitive to global oil price fluctuations.
2. The city hosts numerous multinational corporations that engage in foreign exchange transactions.
3. Financial managers in Houston must navigate risks related to currency exchange rates due to its international business connections.
4. Houston's port is one of the busiest in the United States, affecting trade balances and exchange rate considerations.
5. The local financial market in Houston includes institutions that provide hedging instruments against currency risk.

Review Questions

• How does Houston's dependence on the energy sector impact its sensitivity to global economic changes?
• Why must financial managers in Houston pay close attention to exchange rates?
• What role does Houston's port play in influencing financial risk management?

Related terms

Exchange Rate: The value of one currency expressed in terms of another currency.

Risk Management: The process of identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize or control their impact.

Hedging: A strategy used to offset potential losses or gains that may be incurred by an investment.