Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We manage exposure to market interest rates by diversifying investments across different fixed-income market sectors and debt across maturities, as well as by matching a portion of our floating-rate assets and liabilities, either directly or through the use of interest rate swap contracts. Unrealized gains and losses on investments in available-for-sale debt securities are reported in comprehensive income.

The following table summarizes the impact of hypothetical changes in market interest rates across the entire yield curve by 1% point or 2% points as of June 30, 2022 on our investment income and interest expense per annum, and the fair value of our investments and debt (in millions, except percentages):

Note: Given the low absolute level of short-term market rates on our floating-rate assets and liabilities as of June 30, 2022, the assumed hypothetical change in interest rates does not reflect the full 100 basis point reduction in interest income and the full 200 basis point reduction in interest income or interest expense, as the rates are assumed not to fall below zero. As of June 30, 2022, some of our investments had interest rates below 2% so the assumed hypothetical change in the fair value of investments does not reflect the full 200 basis point reduction.