(Answered) What measure should be used cumulative HDD or CDD

Finance

Problem: An ice cream company is considering a weather call option to protect its sales position against unexpectedly low temps in May and June. Assume that the strike price is 300 (CDD) the payment rate is 1500 per degree day and the payment cap is 180,000. Please explain your answer and also provide examples

Required:

a. What measure should be used cumulative HDD or CDD?

b. If the number of cumulative degree days turns out to be 412, what is the company's payoff?

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