Question: All other solution on Chegg seems wrong, plz do not copy that!! Handwriting preferred, thanks!! Section A) Consider the European digital option that pays a

All other solution on Chegg seems wrong, plz do not copy

All other solution on Chegg seems wrong, plz do not copy that!! Handwriting preferred, thanks!!

Section A) Consider the European digital option that pays a constant H if the stock price is above strike price X at maturity and zero otherwise. Assuming stock price S follows the following SDE under physical measure ds. = udt + odBt Assuming the risk-free rate is constant r. Please write down the price of this option and explain how it is related to the price of the standard Black-Scholes European call option

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