Correct Answer: My friend greeted me and asked me what I was doing there.

Solution : The second option is the correct choice.

In the case of exclamatory sentences, specific words are used to convey the expression in the reported speech.

Narration Conversion: 

• Said is changed to greeted because it is an exclamatory sentence.
• The question is converted into a statement (what I was doing).
• The present tense is changed to the past tense. 

Therefore, the correct sentence is: My friend greeted me and asked me what I was doing here.