This trick is the same one used for tightening a loose metal lid on a glass jar or fitting a metal ring onto an axle: heat the metal part so it grows slightly bigger, slide it into place while it is still hot, then let it cool.
As the rim cools back down to room temperature, it contracts, and since the wooden wheel underneath does not shrink along with it, the rim ends up gripping the wood far more tightly than if it had simply been hammered on cold.
This whole process depends on one simple fact, metals expand when heated and shrink when they cool back down, which is why the rim has to be heated first and cooled only after it is in position.
That sequence, heat then cool, with shrinking on cooling as the reason it grips, is exactly what makes the fit work.
Another way to reach the same answer is to reason about what would go wrong if the process were done in the wrong order, rather than starting from the correct sequence directly.
Only heating first, cooling after, with shrinkage on cooling as the working principle, actually achieves a tight fit, which is why that option is correct.
Therefore, the correct answer is Heated, cooled, the metal shrinks as it cools.

