The Federation Server component in DB2 facilitates the integration of DB2 with external systems. It enables access to distributed data sources as if they were within a single database, enhancing interoperability. 

Option 2: Combining tables - Denormalization involves combining normalized tables into fewer tables to reduce the number of joins required in queries. By doing so, the database architect can decrease the complexity of queries, leading to improved query performance. However, it's essential to carefully analyze the trade-offs, such as potential data redundancy and update anomalies, before implementing denormalization. This option is correct because combining tables is a fundamental step in denormalizing a database schema to optimize query performance. 

Partitioning a table in DB2 serves the purpose of efficiently distributing and managing data across multiple storage devices or file systems. It enables better query performance by allowing parallel processing of data across partitions. Additionally, it enhances data availability and provides easier management of large datasets. 

Option 2, assessing scalability requirements, involves understanding the expected growth in data volume, user concurrency, and application complexity to determine if the current hardware can accommodate future demands. This step is essential for ensuring that the upgraded hardware can support anticipated increases in workload without experiencing performance bottlenecks. Evaluating current hardware utilization (option 1) helps identify existing resource constraints but may not provide insight into future scalability needs. Analyzing workload characteristics (option 3) helps assess the types of operations and resource demands expected from the system, guiding hardware selection based on workload patterns. Considering cost implications (option 4) is important for budgeting and ROI analysis but should be balanced with performance requirements and scalability considerations. 

Visual Explain assists in identifying areas for query optimization. By visualizing the query execution plan, developers and database administrators can pinpoint potential performance bottlenecks and take steps to improve the efficiency of their SQL queries. This includes optimizing indexes, rewriting queries, or restructuring the database schema. 

Fetching multiple rows with a single fetch operation can optimize the performance of cursors in this scenario. By reducing the number of round trips between the application and the database, fetching multiple rows at once minimizes network overhead and improves overall query performance, especially when dealing with large result sets. 

The role of the DB2 Setup wizard during installation is to guide users through the setup process. It provides step-by-step instructions for configuring various aspects of the installation, such as specifying installation directories and choosing components to install. 

During DB2 installation, users can choose between different installation options based on their requirements. Express installation offers a quick setup with default settings, while Custom installation allows users to customize installation parameters according to their needs. Typical installation provides a standard setup with common configurations, and Advanced installation offers extensive customization options for experienced users. 

The AVG() function in DB2 calculates the average of a set of values in a column. When NULL values are encountered, the AVG() function ignores them during the calculation, effectively treating them as missing data and excluding them from the average calculation. Therefore, NULL values do not contribute to the sum of values divided by the count of non-NULL values. 

The DELETE command is used to remove rows from a table based on a specified condition. It is commonly used to delete specific records or all records from a table depending on the condition.