Out of the given options, choose the Direct Speech for the sentence:-…

The correct answer is Option (2) → He said, 'Alas! I am undone.'

Exclamation: indirect to direct speech:

Change	Indirect	Direct	Why
Reporting verb	exclaimed	said	“Exclaimed” becomes the plain said, and the exclamation is put inside the quotation marks.
Tense change	was	am	Past “was” goes back to the present am. “That” is dropped.
Pronoun change	he	I	He becomes I, because the speaker talks about himself.
Interjection	sadly	Alas!	“Sadly” shows sorrow, so the direct speech begins with Alas!, the interjection of grief.
Full sentence	He exclaimed sadly that he was undone.	He said, ‘Alas! I am undone.’

Meaning kept: undone (ruined) stays as it is.

Example: Alas, the old banyan tree has been cut down.

Why the Other Options are Incorrect?

Option 1: He said, 'I am undone!' — Incorrect. It leaves out the sorrow shown by "sadly". There is no interjection such as "Alas!".

Option 3: He said, 'Sadly I am done.' — Incorrect.

• "Done" (finished) is not "undone" (ruined).
• "Sadly" is not an exclamation.

Option 4: He said, 'Alas! I am done.' — Incorrect. The interjection is right, but "done" changes the meaning of "undone".