Which combination of steps will meet these requirements?

Explanations:

Modifying the DB instance from a Single-AZ to a Multi-AZ deployment enhances availability and provides automatic failover. In a Multi-AZ deployment, RDS automatically replicates database updates to a standby instance in another Availability Zone, ensuring high availability and better recovery options.

Taking a snapshot and restoring it to a new RDS deployment does not inherently improve availability or performance. This option creates a separate DB instance, but it does not address the need for high availability or reduce the impact of reporting processes on transaction performance.

Creating a read replica allows the company to offload reporting queries to the replica, thereby reducing the load on the primary DB instance. This improves the performance of transaction processing, as the primary instance can handle customer transactions without the overhead of report generation.

Migrating to RDS Custom is not necessary for achieving high availability or improving reporting performance. RDS Custom is designed for specialized database requirements, but it does not provide the required benefits outlined in the scenario.

Using RDS Proxy to limit reporting requests to a maintenance window does not improve overall performance or availability of the database. It merely schedules when reports can be run, which does not solve the problem of performance degradation during transaction processing.