When forecasting time series data with cyclical patterns, an analyst using simple regression can base the forecasting equation on the logarithms of the data.

Question

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When forecasting time series data with cyclical patterns, an analyst using simple regression can base the forecasting equation on the logarithms of the data. This is because taking the logarithm of the data can help to stabilize the variance and make the relationship between the variables more linear, which can improve the accuracy of the forecasting model.

When Forecasting Time Series Data with Cyclical Patterns, an Analyst