What is correct in this situation?

You chose the correct answer. The traffic sign visible ahead warns that the "right-before-left" rule applies at the next intersection, meaning vehicles coming from the right have priority. In this case, normal priority rules do not apply—you must always yield to vehicles approaching from your right at this intersection. There is no sign giving you right of way and the end of a traffic-calming zone is not shown here, so only the first statement is correct. Knowing this rule will help you recognize intersections where extra attention to right-side traffic is needed.