To Grandpa, the medicine bag represents his cultural heritage, his father, and his son. 16 At the end of the story, Martin puts the sacred sage—an aromatic plant—in his medicine bag. Why does he do this? It fulfills Grandpa's wish.
Based on the excerpt given above from "Yearbook", I can say that what we can conclude as readers based on the interaction between Martina and Fatima is that she is showing a friendly and welcoming attitude towards the new members of the yearbook club. And the answer would be the third option. Hope this helps.