What is the right thing to do?

In this situation, you are approaching a roundabout. German traffic rules state that vehicles already inside the roundabout have the right of way, and you must always indicate when you are exiting. The yellow car on your left must wait before entering, because you have right of way as you are already (or about to enter) the roundabout. You must also indicate, as required when leaving a roundabout. So, answers 1 (I have to indicate) and 2 (The yellow car has to wait) are both correct. You correctly selected both, which means you understand the right priority and signaling in roundabout situations.