Final answer:
A yellow and black sign with three arrows in a circle is an indication of a traffic circle ahead, where drivers should follow the directional arrows and yield to the traffic already in the circle.
Step-by-step explanation:
A yellow and black sign with three arrows forming a circle typically indicates the presence of a traffic circle or roundabout. The correct interpretation of this sign is: C) Traffic circle ahead - Follow directional arrows. This kind of signage is designed to inform drivers that they are approaching a circular intersection where traffic moves in one direction around a central island. Drivers must enter the circle by yielding to traffic already circulating, and follow the arrows which show the correct direction of travel around the circle. It's also a sign for drivers to reduce their speed before entering the circle and abide by the posted speed limit to ensure the safety of all road users.