Question #70
Reading: Reading 2 Time-Series Analysis
PDF File: Reading 2 Time-Series Analysis.pdf
Page: 33
Status: Unattempted
Correct Answer: B
Question
Modeling the trend in a time series of a variable that grows at a constant rate with continuous compounding is best done with:
Answer Choices:
A. simple linear regression
B. a log-linear transformation of the time series
C. a moving average model
Explanation
The log-linear transformation of a series that grows at a constant rate with continuous
compounding (exponential growth) will cause the transformed series to be linear.