Because he's asking question, #2 is correct. You'll hear people use #1, but they're not quite accurate.
None of the others are correct because of the extra comma in each. If you remove those commas, though, #s 4, 6, and 8 will be correct.
1. She said, "Are you happy?"
2. She asked, "Are you happy?"
3. "Are you happy?", she said.
4. "Are you happy?", she asked.
5. "Are you happy?", said the lady.
6. "Are you happy?", asked the lady.
7. "Are you happy?", said she.
8. "Are you happy?", asked she.
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In terms of word order, Are #7 and #8 correct? What about the others? Am I using punctuation marks correctly?
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