2) A digital option pays $1 if S(T) > K and 0 otherwise. a) of the three methods studied in class which ones could be used to price a digital option. Explain. b) Use the risk-neutral pricing approach to analytically compute the price of a digital option (assume that Se follows the usual geometric brownian motion). 2) A digital option pays $1 if S(T) > K and 0 otherwise. a) of the three methods studied in class which ones could be used to price a digital option. Explain. b) Use the risk-neutral pricing approach to analytically compute the price of a digital option (assume that Se follows the usual geometric brownian motion)