None of the above.

The current flowing through the wire energises it, and in the presence of the applied magnetic field an energised wire will dissipate some of this energy through vibration.

When alternating current flows through the wire, it will vibrate very slightly in the presence of Earth's magnetic field. The vibration caused by the Earth's magnetic field is amplified by the magnets on the sonometer so that they are large enough to see.

When current flows through the wire it is then attracted towards one of the magnets. This current (and attraction) then alternates at the frequency set by the function generator.

The alternating current flows through the static magnets, causing the magnetic field from those magnets to oscillate at the chosen frequency. The wire is in this magnetic field so it matches the frequency of the magnetic field changing.