What is the right course of action?

Your answer is fully correct because of the following reasons:

You are on a priority road, as indicated by the yellow diamond sign. This means you have the right of way over vehicles coming from side streets.

However, the yellow car is on a side road joining the priority road, so it must yield to you.

The motorcycle is already on the main road and moving straight ahead, so you must wait until it passes before you turn left to avoid collision and to respect right-of-way rules.

Therefore, you should turn only after the motorcycle and before the yellow car, which matches your choice of answers 1 and 2. Choosing to be the first to turn (option 3) would be incorrect because the motorcycle has the right of way and goes first.

In summary, always remember that on a priority road you have priority over vehicles coming from non-priority roads, but you must yield to vehicles already on the main road or those with right of way, such as oncoming vehicles when turning left.