Which of the Following Correctly Identifies a Limitation of Logarithmic

Multiple Choice

Which of the following correctly identifies a limitation of logarithmic transformation of variables?

A) Taking log of variables make OLS estimates more sensitive to extreme values in comparison to variables taken in level.
B) Logarithmic transformations cannot be used if a variable takes on zero or negative values.
C) Logarithmic transformations of variables are likely to lead to heteroskedasticity.
D) Taking log of a variable often expands its range which can cause inefficient estimates.