The correct answer is **“If it rains,” he said, “we will stay indoors.”** (Option 2). **Comprehensive Derivation:** The correct answer is - “If it rains,” he said, “we will stay indoors.” Explanation & Key Takeaways: • From the given options, the most appropriate answer is “If it rains,” he said, “we will stay indoors.” • Quotation Marks ( " ") are used to enclose words and punctuation in direct speech. • Eg. She shouted, “We have to win.” • Given sentence is in direct speech. • In direct speech, Reported speech is always enclosed in inverted commas. • Here 'if it rains' and 'we will stay indoors' are reported speech. • Reporting speech is used to express speaker and how he/she speaks. • Reported speech is what speaker speaks to someone. • Full stop (.) is used to mark the end of an assertive or an imperative sentence. • Eg. I will go to the school. • Thus, Option 2 is correct option **Option Elimination:** • **Option 1 (If it rains he said we will stay indoors.)**: Incorrect distractor. • **Option 2 (“If it rains,” he said, “we will stay indoors.”)**: Correct Answer; accurate according to canonical reference. • **Option 3 (“If it rains!” he said, ‘we will stay indoors.)**: Incorrect distractor. • **Option 4 (If it rains, he said. we will stay indoors,)**: Incorrect distractor. **Exam Trap:** Be careful of misleading distractors and subtle terminology differences. Verify core properties before selecting your answer. **Memory Booster:** Core mnemonic rule: “If it rains,” he said, “we will stay indoors.” corresponds to Option (2).