The correct answer is The ally was free to enter into agreements with other rulers or engage in warfare.Subsidiary Alliance: Subsidiary Alliance was a system devised by Lord Wellesley in 1798. All those who entered into such an alliance with the British had to accept certain terms and conditions.The British would be responsible for protecting their ally from external and internal threats to their power. Hence, option 1 is correct.In the territory of the ally, a British armed contingent would be stationed. Hence, option 3 is correct.The ally would have to provide the resources for maintaining this contingent. Hence, option 4 is correct.The ally could enter into agreements with other rulers or engage in warfare only with the permission of the British. Hence, option 2 is incorrect.According to this system, every ruler in India had to accept to pay a subsidy to the British for the maintenance of the British army.