Correct answer: A. The riskfree rate increases

Under the cost-of-carry relationship, a higher risk-free rate increases the carrying cost of holding the underlying asset and therefore tends to increase the futures price.

Why the other choices are false:

• B: Delivery location options favor the short and tend to reduce the futures price.
• C: Delivery timing options also benefit the short and tend to reduce the futures price.
• D: A convenience yield lowers the futures price because it provides a benefit from holding the physical commodity, reducing the cost of carry.