The correct option is B she could
In reported speech, the word order and pronouns will be different from
the original speech, because the speaker has changed. Accordingly, the
tense will also change, in most cases.
The simple present tense in direct speech usually changes to simple past tense in the reported form.
It
isn't always necessary to change the tense. The given speech states a fact "can solve this sum" which still holds true. Hence the
tense remains as present simple.
Option A: 'She can' is in the
present simple, the subject 'I' has changed to 'she' as the narrator has
changed. The modal verb 'can' remains the same. Hence A is the correct option.
Option B: 'She could' is in the simple past tense. But, the ability 'can solve' is a truth, not a particular event. Hence the tense does not change to past. So, option B
is incorrect.
Options C and D: The subject and verb changes in reported speech, 'I' will change to 'she' as the narrator has changed. ('She' refers to Dolly.)
Hence options C and D are incorrect.