What is the difference between 'observation' and 'inference' in TARP reporting?

What is the difference between 'observation' and 'inference' in TARP reporting?

• A. Observation is what is directly seen or heard; inference is an interpretation; reports should be based on observable facts.
• B. Observation is speculation; inference is factual.
• C. Inference is what is directly seen; observation is interpretation.
• D. Both are the same.

Answer: (A)