Select the option that expresses the given sentence in indirect speech.

She said, “I can play the guitar pretty well.”

She said that she could play the guitar pretty well.

The correct option is She said that she could play the guitar pretty well.

The original sentence is in the present tense, so the reported speech in indirect speech should also be in the present tense. The modal verb "can" is used to express ability, and it does not change tenses in indirect speech.

The other options are incorrect because:

• "She said that she plays the guitar pretty well" uses the present tense, but the original sentence was in the present perfect tense.
• "She said that she would play the guitar pretty well" uses the future tense, which is not correct for a reported speech of a sentence that is happening in the present.
• "She said that she can play the guitar" is the same tense as the original sentence, but the reporting verb is "said" instead of "could", which is incorrect for a reported speech of a present perfect tense sentence.