Consider the following two statements.

1. When a scatter plot shows a non-linear relationship between a quantitative dependent variable (e.g. sales) and a quantitative independent variable (e.g. ad spending), the data scientist cannot continue with regression analysis, because there is no way to deal with non-linearities between quantitative variables in regressions.

2. A potential non-linear relation between a dependent variable and a categorical independent variable can be addressed by representing the independent variable by dummies.

Which statement(s) is(are) true?