What is correct in this situation?

Answer 1 is correct because you have a green traffic light for your direction. A green light gives you the right to proceed, and oncoming traffic is stopped by its red light, so you can turn without having to yield to vehicles coming straight toward you.

Answer 2 would only be true if the oncoming traffic also had a green signal (or a green arrow) at the same time, because then a left turn must generally yield to oncoming traffic going straight or turning right. That is not the case here.

Answer 3 applies when you are allowed to enter the junction but cannot complete the turn immediately because oncoming traffic has priority. Then you may wait in the middle of the junction to clear it quickly when there is a gap. Here you don’t need to do that, because the oncoming traffic is not allowed to drive.

Rule of thumb: With a normal green light, left-turners must yield to oncoming traffic unless that oncoming traffic is stopped by a red light or you have a protected green arrow.