What is the right thing to do?

Your answer is fully correct. You need to indicate your intention to turn right because there is a traffic sign mandating a right turn at this intersection. Signaling is important to inform other road users, including the yellow car.

The yellow car has to wait because you are already in the roundabout and have the right of way. Vehicles inside the roundabout have priority over those entering it.

The option that you have to wait is incorrect because you are already positioned to enter the roundabout and must proceed after signaling. Waiting unnecessarily would disrupt traffic flow.

Remember that in Germany, when entering a roundabout, vehicles inside have the right of way, and you must signal your turn to communicate your intentions clearly. This helps prevent confusion and accidents.