Figure 2
The vertical bar chart shows two side-by-side panels labeled “(a) V G - delta K underscore max” on the left and “(b) V G - delta Incentive underscore max” on the right. In panel (a), the horizontal axis is labeled “delta C V” with category values 0.02, 0.05, and 0.1, and the vertical axis is labeled “delta K subscript max (K R W)” and ranges from negative 1,000,000 to 0 with an increment of 500,000. Each delta C V category contains three vertical bars corresponding to the legend labeled “alpha”, with levels 0.25, 0.5, and 1. For delta C V equal to 0.02, the bars reach approximately negative 50,000 for alpha equal to 0.25, approximately negative 132,596 for alpha equal to 0.5, and approximately negative 254,000 for alpha equal to 1. For delta C V equal to 0.05, the bars reach approximately negative 154,696 for alpha equal to 0.25, approximately negative 331,000 for alpha equal to 0.5, and approximately negative 679,558 for alpha equal to 1. For delta C V equal to 0.1, the bars reach approximately negative 331,000 for alpha equal to 0.25, approximately negative 685,000 for alpha equal to 0.5, and approximately negative 1,364,640 for alpha equal to 1. In panel (b), the horizontal axis is labeled “delta C V” with category values 0.02, 0.05, and 0.1, and the vertical axis is labeled “delta Incentive subscript max (K R W)” and ranges from negative 500,000 to 0 in increments of 100,000. Each delta C V category contains three vertical bars corresponding to the legend labeled “beta”, with levels 0.25, 0.5, and 1. For delta C V equal to 0.02, the bars reach approximately negative 19,920 for beta equal to 0.25, approximately negative 47,000 for beta equal to 0.5, and approximately negative 100,000 for beta equal to 1. For delta C V equal to 0.05, the bars reach approximately negative 57,000 for beta equal to 0.25, approximately negative 121,513 for beta equal to 0.5, and approximately negative 250,000 for beta equal to 1. For delta C V equal to 0.1, the bars reach approximately negative 119,521 for beta equal to 0.25, approximately negative 250,000 for beta equal to 0.5, and approximately negative 500,000 for beta equal to 1. Note: All numerical values are approximated.Volatility guardrail for strike price and incentive adjustment