A business stakeholder wants to use a very high-degree Polynomial Regression for forecasting, arguing that it fits the historical data perfectly. How would you explain the risks of this approach and suggest a more robust method?

  • Encourage the high-degree approach
  • Explain the risk of overfitting and suggest using cross-validation or regularization
  • Focus only on training data
  • Ignore the stakeholder's suggestion
The high-degree approach is prone to overfitting and may not generalize well to future data. Explaining this risk and suggesting more robust methods such as cross-validation or regularization can help in building a more reliable forecasting model.
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