Pick out the correct sentence in indirect narration of the following sentence: He said, 'How wise I am!'

"How wise I am!" is an exclamatory sentence that shows pride. 

So, when converting to indirect speech, we:

• Change the pronoun "I" to "he" (to match the speaker).
• Change present tense ("am") to past tense ("was").
• Use "exclaimed that..." to retain the tone of exclamation.

Hence, the correct indirect speech would be : He exclaimed that he was very wise.

Other options:

1. Incorrect pronoun; "I" should become "he".

2. Tense is incorrect, and "I" should become "he".

3. Wrong reporting verb; "regretted" doesn’t fit the context.