Converting "She said to her friend, 'I know where everyone is.'" into indirect speech requires two things: keeping the addressee (her friend) as the object of "told," and correctly shifting both verbs, "know" and "is," one tense back since the reporting verb "said" is in the past. Checking each option against these two requirements identifies the right one.
- She told that she knew where was everyone: The tense shift here (know to knew, is to was) is handled correctly, but the sentence drops "her friend" entirely, losing the addressee that was named in the original quote, so it fails on completeness.
- She told her friend that she knew where was everyone: This keeps "her friend" as the object of "told" and correctly shifts both "know" to "knew" and "is" to "was," satisfying both requirements the conversion demands.
- She told her friend that she knew where is everyone: "Her friend" is retained correctly and "know" is shifted to "knew," but "is" is left in the present tense instead of shifting to "was," breaking the backward tense shift rule.
- She told her friend that she knows where was everyone: "Her friend" and the shift of "is" to "was" are both handled, but "know" is left as "knows" instead of shifting to "knew," which is inconsistent with reporting the statement in the past.
Only one option satisfies both the addressee requirement and the full backward tense shift that converting this sentence into indirect speech demands.
Therefore, the correct answer is She told her friend that she knew where was everyone.