Would it be convenient to use a machine learning model directly on the time series below?

I No, because the level of the time series is too high, going beyond 4000.
II No, because the time window of the time series is too wide.
III No, it would be better to test for the non-stationarity of the time series and transform it before applying any model.
IV Yes, machine learning can deal with any type of time series without problems.

Question

Would it be convenient to use a machine learning model directly on the time series below?

I	No, because the level of the time series is too high, going beyond 4000.
II	No, because the time window of the time series is too wide.
III	No, it would be better to test for the non-stationarity of the time series and transform it before applying any model.
IV	Yes, machine learning can deal with any type of time series without problems.

BlackTom AI · Accepted Answer

Let's break down the question and each of the answer choices carefully.
Option IV: "Yes, machine learning can deal with any type of time series without problems." This is overly optimistic and incorrect in practice. Many time series have issues like non-stationarity, seasonality, or varying variance that require preprocessing or specialized models. Simply applying a generic ML model without consideration of these characteristics often leads to poor performance. So this statement is not true.
Option III: "No, it would be better to test for the non-stationarity of the time series and transform it before applying any model." This option reflects a sound approach in time series analysis. Non-stationarity can violate model assumptions and degrade predictive power. Testing for non-stationarity (e.g., unit root tests) and applying transformations (like differencing, detrending, or log transforms) helps stabilize the mean and variance, making the series more amenable to modeling. Therefore this statement is correct.
Option I: "No, because the level of the time series is too high, going beyond 4000." This answer focuses on the absolute level value, which by itself doesn’t determine whether a model can be used. Machine learning models can handle large numeric ranges with proper normalization or scaling. The issue isn’t the absolute level but the statistical properties of the series, such as non-stationarity, not addressed here. Hence this is not a correct justification.
Option II: "No, because the time window of the time series is too wide." While a very long window can complicate modeling, it is not a universal disqualifier for applying ML. Techniques like windowing, feature engineering, or sequence models can handle long histories. The statement is too absolute and ignores possible preprocessing or modeling strategies that cope with long windows. So this is not entirely accurate.
Option I and III: This combines I and III. Since I is not a valid reason on its own, combining it with a valid reason (III) doesn't make the overall claim correct. The composite justification would be flawed because it relies on an incorrect assertion about the level (I).
Option II and III: This combines II and III. While II is not entirely wrong in some contexts, the key actionable and widely accepted reason is III about non-stationarity. However, pairing II with III could be misleading if II is not a definitive barrier. The presence of III makes this option more plausible than those that rely on I, but it still mixes an imperfect justification with a correct one.
In summary, option III stands out as the only statement that correctly identifies a necessary preprocessing step for time series before modeling, namely testing for non-stationarity and transforming the data as needed. The other options either overstate the capabilities of ML on all time series or rely on flawed or incomplete justifications about the data characteristics.

FINTECH 540.01.Fa25 Final Exam

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