Select the correct indirect form of the given sentence.

She said, "Let us wait for the bus".

She proposed that they should wait for the bus.

The correct indirect form of the given sentence is:

She suggested that they should wait for the bus.

The other options are incorrect for the following reasons:

• She proposed that they could wait for the bus. The modal verb "could" is less certain than "should", so it is not the best choice for reporting a statement that is still in the present tense.
• She proposed to wait for the bus. This is not the correct way to report an imperative sentence in indirect speech.
• She proposed let us wait for the bus. This is a direct quote of the speaker's words. In indirect speech, the imperative sentence is reported as a subordinate clause.