Business and Personal Finance Dictionary

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• DEGREE-DAY
  
  A unit of measure for the deviation of a day's average temperature from the arbitrary standard of 65 degrees Fahrenheit. The U.S. Energy Information Administration publishes indexes of accumulated Degree Days. If the average temperature one day is 75 (55) degrees, then the index increases (decreases) ten Degree-Days on that day. Degree-days come in two varieties – Heating Degree-Days and Cooling Degree-Days. When the average temperature is above (below) 65 degrees, then the number of cooling (heating) Degree-Days increases. (Source: Victor Kremer, "Utility to Make First Use of Degree-Day Swaps, Derivatives Week, 5/5/97.)
  
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