filings.toolsItem 7A. Quantitative and Qualitative Disclosure About Market Risk
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Item 7A. Quantitative and Qualitative Disclosure About Market Risk
Interest Rate Risk. Our cash equivalents consist of high-quality securities, as specified in our investment policy guidelines. The policy limits the amount of credit exposure to any one issue or issuer to a maximum of 5% of the total portfolio with the exception of U.S. treasury and agency securities and money market funds, which are exempt from size limitation. The policy requires investments in securities that mature in three years or less, with the average maturity being no greater than one and a half years. These securities are subject to interest rate risk and will decrease in value if interest rates increase. A decrease of one percent in the average interest rate would have resulted in a decrease of approximately $2.3 million in our interest income for the fiscal year 2020.
| Maturing in | ||||||||||||||||||||||||||||||||
| Three Months or Less | Three Months to One Year | Greater Than One Year | Total | Fair Value | ||||||||||||||||||||||||||||
| (in thousands, except for percentages) | ||||||||||||||||||||||||||||||||
| September 30, 2020 | ||||||||||||||||||||||||||||||||
| Included in cash and cash equivalents | $ | 250,970 | $ | — | $ | — | $ | 250,970 | $ | 250,970 | ||||||||||||||||||||||
| Weighted average interest rate | 0.6 | % | — | — | — | — | ||||||||||||||||||||||||||
| Included in short-term investments | $ | 51,871 | $ | 308,462 | $ | — | $ | 360,333 | $ | 360,333 | ||||||||||||||||||||||
| Weighted average interest rates | 1.4 | % | 1.5 | % | — | — | — | |||||||||||||||||||||||||
| Included in long-term investments | $ | — | $ | — | $ | 102,939 | $ | 102,939 | $ | 102,939 | ||||||||||||||||||||||
| Weighted average interest rate | — | — | 1.6 | % | — | — | ||||||||||||||||||||||||||
| September 30, 2019 | ||||||||||||||||||||||||||||||||
| Included in cash and cash equivalents | $ | 293,642 | $ | — | $ | — | $ | 293,642 | $ | 293,642 | ||||||||||||||||||||||
| Weighted average interest rate | 2.1 | % | — | — | — | — | ||||||||||||||||||||||||||
| Included in short-term investments | $ | 98,811 | $ | 274,252 | $ | — | $ | 373,063 | $ | 373,063 | ||||||||||||||||||||||
| Weighted average interest rates | 2.1 | % | 2.2 | % | — | — | — | |||||||||||||||||||||||||
| Included in long-term investments | $ | — | $ | — | $ | 358,402 | $ | 358,402 | $ | 358,402 | ||||||||||||||||||||||
| Weighted average interest rate | — | — | 2.5 | % | — | — | ||||||||||||||||||||||||||
| September 30, 2018 | ||||||||||||||||||||||||||||||||
| Included in cash and cash equivalents | $ | 54,336 | $ | — | $ | — | $ | 54,336 | $ | 54,336 | ||||||||||||||||||||||
| Weighted average interest rate | 1.1 | % | — | — | — | — | ||||||||||||||||||||||||||
| Included in short-term investments | $ | 146,376 | $ | 468,329 | $ | — | $ | 614,705 | $ | 614,705 | ||||||||||||||||||||||
| Weighted average interest rates | 1.4 | % | 1.7 | % | — | — | — | |||||||||||||||||||||||||
| Included in long-term investments | $ | — | $ | — | $ | 411,184 | $ | 411,184 | $ | 411,184 | ||||||||||||||||||||||
| Weighted average interest rate | — | — | 1.9 | % | — | — |
Foreign Currency Risk. The majority of our sales and expenses are denominated in U.S. dollars and as a result, we have not experienced significant foreign currency transaction gains and losses to date. While we have conducted some transactions in foreign currencies during the fiscal year ended 2020 and expect to continue to do so, we do not anticipate that foreign currency transaction gains or losses will be significant at our current level of operations. However, as we continue to expand our operations internationally, transaction gains or losses may become significant in the future. We have not engaged in foreign currency hedging to date. However, we may do so in the future.
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