“I am reading” is a different verb tense, but it is often used in English instead of “I read”. Verb tenses are used differently from one language to another.
“Yo leo” can mean “I read”, “I am reading” or “I do read”.
No, maestro = teacher
master (by itself) = señor
schoolmaster = maestro
In the context of this sentence, "my teacher" is the best answer.
If someone is a master of something, music, etc., we are honoring them with the status of master and would not then say "my".
Try reporting it as also correct, but only for the exercise in which you are to translate from Spanish to English. I cannot tell you how many people translate to English when they were supposed to put iit in Spanish, so double check Duolingo's instructions to you before reporting.