All SAT multiple choice questions have 5 answer choices, and are usually listed in increasing or decreasing order. So choice (E) is of course the right answer.
This would be considered a "hard" question on the SAT which means that it would most likely appear towards the end of a multiple choice section. If your current SAT Math score is below a 550, then this is a question that you would most likely omit. I would in fact strongly recommend omitting this level of question if you walked into the SAT and have never seen anything like it.
That said, this question is very simple once you understand what they are asking.
The notation f(x) is just a more confusing way to say y. So the question is asking "on this graph, when is the y-coordinate equal to 0.2?"
You can easily answer this by looking for y=0.2 on the y-axis, and then drawing a horizontal line cutting all the way through the graph (as Plato did above), and counting how many times this line hits the graph.
To summarize, all you need to remember is the following:
In an SAT problem with a graph, and an expression "f(x)=c" in the question where c is some number, just draw a horizontal line through that number on the y-axis, and count how many times it hits the graph.
You will almost certainly get the question correct.