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Question

A Transform the data by taking logs Correct Answer Incorrect Answer
B Difference the series to obtain stationary data Correct Answer Incorrect Answer
C Fit an MA (1) model to the time series Correct Answer Incorrect Answer
D None of the above Correct Answer Incorrect Answer
E All of the above Correct Answer Incorrect Answer

Solution

The autocorrelation shows a definite trend and partial autocorrelation shows a choppy trend, in such a scenario taking a log would be of no use. Differencing the series to obtain a stationary series is the only option.

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