How should you behave in this situation?

You answered correctly. In this situation, you have a green light for your direction and there is a stop sign for traffic coming from the right. The stop sign does NOT apply to you; it only applies to cross traffic. As you have right of way with the green light, you can proceed through the intersection without stopping, as indicated by answer 1. Always make sure to respect your own traffic signals and markings, and only stop if a signal or sign applies to your lane.