Which of the following is a method of observational assessment?

The selection of directly observing student participation during activities as a method of observational assessment is correct because it involves gathering data through firsthand observation. This approach allows educators to evaluate students' skills, engagement levels, and overall performance in real-time during physical education activities. Observational assessments are particularly valuable because they provide insight into not only what students do but also how they interact with their peers, follow instructions, and apply learned skills in practical scenarios.

In contrast, tracking student physical education attendance is more about record-keeping and does not provide direct insights into student performance or engagement. Giving out tests based on theoretical knowledge assesses students' understanding of concepts rather than their practical application. Conducting surveys about student preferences collects opinions and information that may not directly align with the observation of skills and participation during physical activities.