It includes transitional forms with progressively specialized teeth.
The key thing to remember about fossils is: If it's not hard, it's rarely preserved. Now let's look at the options and pick the correct one that matches the known facts.
It includes a series that shows the gradual change of scales into fur.
* This option is rather hard to swallow. There have been a few fossils discovered with soft tissue features, but those fossils are extremely rare. Expecting a record of a gradual change of soft tissues is not likely. So this is a bad choice.
It shows that mammals and birds evolved from the same kind of dinosaur.
* The evidence shows that mammals evolved at the end of the Triassic period from therapsids (about 201 to 250 million years ago). Birds are a relative newcomer with Archaeopteryx being approximately 150 million years ago. So this choice is wrong.
It indicates that mammals and dinosaurs did not overlap in geologic time.
* Nope. Mammals existed throughout the Jurassic period that came after the Triassic period where the first mammals were discovered. So this is a bad choice.
It includes transitional forms with progressively specialized teeth.
* Most definitely. Teeth are nice hard structures that are easily fossilized. And this is the correct choice.
