I know that it is not meant to be included, but maybe you could specify that it didn't include Denver itself. If not Denver should be included when it is a state capital and it is 0 km away from Denver.
We use the common conversational English concept of closeness to mean "near but outside of". If you say "I was near Denver", no-one will think you were actually in Denver. Instead, they'll think you were somewhere outside it but nearby. This quiz takes the same approach. In any case, you are given that the closest answer is 98 km away, so you know that we exclude the concept of "Denver being close to Denver".