Step 1: Understanding digital signals.
Digital signals represent information using discrete values, usually binary levels such as 0 and 1.
Step 2: Analysis of options.
(A) Correct, digital signals have discrete stepwise values.
(B) Incorrect, sound and picture signals are analog in nature before digitization.
(C) Incorrect, continuous variations correspond to analog signals.
(D) Incorrect, sine waves are continuous analog waves.
Step 3: Conclusion.
Digital signals are characterized by discrete stepwise values only.