In both inference and observation, you have to monitor or observe something.
Here's one example, you can build on it:
Sherlock Holmes 'observed' the scene below him.
His 'inference' was based on the evidences given to him.
Here's the definition of both of them...
the action or process of closely observing or monitoring something or someone is called observation.
a conclusion reached on the basis of evidence and reasoning is inference.
The first answer should be correct, as none of the others make any sense.
