If a Time Series Exhibits Increasing Seasonal Variation, One Approach

question 47

Multiple Choice

If a time series exhibits increasing seasonal variation, one approach is to first use a(n) ________ transformation that produces a transformed time series that exhibits constant seasonal variation. Then, ________ variables can be used to model the time series with constant seasonal variation.

• A) autocorrelation, dummy
• B) fractional power, dummy
• C) fractional power, constant
• D) autocorrelation, constant