Option 2 is the correct answer. The given statement is in Direct Speech and in the simple present tense. On conversion into Indirect Speech, the given sentence will become: Greg said that the paintings were expensive. When converting the statement into Indirect Speech: 1) the words of the speaker are not written in quotes. 2) usually, the word ‘that’ is used to convey the words of the speaker. 3) the original tense of the statement is changed accordingly. Given below are the rules of tense conversion in Direct to Indirect Speech and vice verse: SENTENCE INDIRECT SENTENCE IN INDIRECT (Changes to) TENSE CHANGE 1. Rina said, "I go to the church.” Rina said that she went to the church. Simple Present to Simple Past 2. Rina said, "I am driving.” Rina said that she was driving. Present Progressive to Past Progressive 3. The man said, "I have cleaned the shelf.” The man said that he had cleaned the shelf. Present Perfect to Past Perfect 4. Ram said, "I have been living in Toronto since 2013.” Ram said that they had been living in Toronto since 2013. Present Perfect Progressive to Past Perfect Progressive 5. Ram said, "I went to the market.” Ram said that he had gone to the market. Simple Past changes to Past perfect 6. Ram said, "I was standing in the rain.” Ram said that he had been standing in the rain. Past Progressive to past Perfect Progressive 7. Ram said, "I had won the match.” Ram said that he had won the match. Past Perfect (NO CHANGE) 8. She said, "I will go to the market.” She said that she would go to the market. ‘Will’ changes to ‘would’ (Simple Future) 9. She said, "I will be going to the market.” She said that she would be going to the market. ‘will be’ changes to ‘would be.’ (Future Continuous) 10. He said, "I will have baked the cake.” He said that he would have baked the cake. ‘Will have’ changes to ‘would have’ (Future Perfect Tense)