I have created a custom list with column "Approved", it is a drop down box with 3 value.
1. Select 2. Yes 3. No
In the view, in "Approved" column I want to display "Pending" in the place of "Select". Please help.
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You need to add "Pending" as the first value instead of Select. Is there something else that you are trying to achieve ??
I'm guessing that you mean if the chosen value is 'Select' you want to display 'Pending'. You can explore the option of using Calculated Column for this. If you do not want one, you can have a small SPD workflow which will do this for you.
Building off of what PurpleShadow said you can go the route of a Calculated Column or a SharePoint Workflow.
I would suggest creating a Status column of type Calculated Column and then inputting the following:
=IF([Approved]=Yes, "Approved", "Pending")
This will basically display Pending in the Status column unless Approved is equal to value "Yes." This is probably the most basic implementation of what you are trying to do, unless you have Designer permissions in your environment then a Workflow would be much better.