a block diagram system is given as per the attached image.

what is the open loop transfer function?
i say it is found by opening the loop and multiplying all of the terms. So that: U = KFYX. Then rearrange for output over input. HOWEVER, my friend say you just ignore the return path completely, so that U = KFY and then you rearrange for output over input.
Based on the definition for open loop TF it seems both could be correct as it is ambiguous. Can anyone tell me the correct answer with authority?