Question

Which would replace the underlined word to give the sentence a more positive connotation while not changing the overall meaning?

Answer 1

C. He is laid back 
being laid back has no negative connotation. 

Answer 2

The answer is C: laid back.

The term  laid back, which means relaxed, is a colloquial and figurative term that can best substitute the word lazy, but without the negative connotations. It should be noted that the word is informal, so that in certain contexts, most notably formal contexts —like communication with an authority figure or in academic settings—, it would not necessarily be the best word choice.