Incorrect: You need to set the forest functional level to Windows Server 2008 R2. Therefore you need to set the domain functional level on all three domains to Windows Server 2008 R2. To do this, you need to ensure that all domain controllers in all domains are running Windows Server 2008 R2.

Correct: You need to ensure that all domain controllers in all domains are running Windows Server 2008 R2. This enables you to raise the domain functional levels to Windows Server 2008 R2, and this in turn enables you to raise the forest functional level to Windows Server 2008 R2.