Problem $5.$ Suppose two option prices with the same underlying asset are available in the market: $C(K=100,T)=$

$7$ and $C(K=100\mathrm{.}1,T)=6\mathrm{.}92.$ Approximate the value of a digital option $D(K=100,T)($round to the first

digit$).$ Please explain your answer.

Answer: $0\mathrm{.}8$

$-(C\frac{K}{100-100\mathrm{.}1}=100,T)-C(K=100\mathrm{.}1,T)$