Which of the following terms refers to the period when the Navy is prepared for and engaged in warfare?

The term that best describes the period when the Navy is prepared for and engaged in warfare is "operation." In a military context, an operation refers specifically to coordinated military actions directed towards achieving a specific objective during warfare. This encompasses all the activities the Navy undertakes while actively engaged in combat, including planning, executing, and managing military actions.

While "deployment" relates to the movement of forces to a specific area, it does not exclusively signify engagement in warfare, as forces can be deployed for various purposes, including training or humanitarian aid. "Readiness" indicates the state of being prepared to engage in combat but does not denote the act of actually conducting warfare. "Mobilization" involves assembling and preparing troops and supplies for war, which precedes the operational phase.

Thus, "operation" is the term that directly refers to the active phase of warfare, making it the most accurate choice.