Explanation

• Rehan says, “I am happy”.
• Change the Speech
• Rehan says that he is happy. 
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•  According to the rules of change from direct speech to indirect speech. Option A is the best choice according to the question requirement
• reporting speech is a present tense, that is why we can not change the tense
  
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• Rules to change Direct Speech into Indirect Speech:

Remove all the inverted commas and quotation marks.

Always end the sentence with a full stop.

The tenses of the verbs inside the quotation marks and commas should be changed.