She said, “We are friends.” Change into Indirect Speech
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Indirect Speech: She said that we were friends.
Explanation: When the reporting verb is in the past (said) and the direct speech is in the present indefinite tense (simple present tense), then the indirect (reported) speech will change into the past indefinite tense.
Present Indefinite Tense > Past Indefinite Tense.
And if the sentence is interrogative, we use the reporting verbs – asked, enquired, etc.