Select the correct option for the Direct Speech conversion of the sentence below.
He observed that, had market liquidity vanished entirely, the exchange would have suspended trading.
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. He said, "Had market liquidity vanished entirely, the exchange would have suspended trading."
Changes required:
Conjunction: The conjunction “that” is removed and replaced with inverted commas (“__”) and a comma to return the sentence to direct speech.
Verb: The reporting verb “observed” can be changed to “said” in a direct speech format as they both convey the reporting of a statement.
Tense: In this sentence, the structure “had... vanished... would have suspended” represents a third conditional (an unreal situation in the past). In Narration, the third conditional remains unchanged when converting between direct and indirect speech because it already reflects the furthest point of the past.
Pronoun: No change is needed for the pronouns or nouns here as the subject “market liquidity” and “the exchange” are in the third person.
Structure: The inverted structure ("Had market liquidity...") is a formal way of expressing "If market liquidity had..." and is maintained to keep the original tone.
Converted sentence: He said, "Had market liquidity vanished entirely, the exchange would have suspended trading."
Hence, the chosen option is correct.