In the following question, a sentence is given in Direct Speech. Out of the four alternatives choose the one which best expresses the sentence in Indirect Speech.
They said," We were living in the USA."
1
They said that they had been living in the USA.
2
They told me that they had lived in the USA.
3
They said that they would have lived in the USA.
4
They said they might have been living in the USA.