Google 2007 Annual Report Download - page 75

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Interest Rate Risk
We invest in a variety of securities, consisting primarily of investments in interest-bearing demand deposit accounts
with financial institutions, tax-exempt money market funds and highly liquid debt securities of corporations and
municipalities. By policy, we limit the amount of credit exposure to any one issuer.
Investments in both fixed rate and floating rate interest earning products carry a degree of interest rate risk. Fixed
rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate
securities may produce less income than predicted if interest rates fall. Due in part to these factors, our income from
investments may decrease in the future.
We considered the historical volatility of short term interest rates and determined that it was reasonably possible that
an adverse change of 100 basis points could be experienced in the near term. A hypothetical 1.00% (100 basis-point)
increase in interest rates would have resulted in a decrease in the fair values of our marketable securities of approximately
$98.8 million and $86.7 million at December 31, 2006 and December 31, 2007.
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