Which is the correct description of the significance of the ORACLE_HOME environmental variable?

Which is the correct description of the significance of the ORACLE_HOME environmental variable?

A.
It specifies the base directory of Optimal Flexible Architecture (OFA).

B.
It specifies the directory containing the Oracle-Managed Files.

C.
It specifies the directory for database files, if not specified explicitly.

D.
It specifies the directory containing the Oracle software.