What type of signal is a digital signal?

A digital signal is characterized by having discrete values, typically represented as binary data, where it can be either in an 'on' state or an 'off' state. This binary representation makes digital signals distinct from analog signals, which can take on a continuous range of values. The defining feature of a digital signal is its ability to convey information in the form of distinct, separate states rather than a fluid spectrum of potential values. Thus, the correct answer highlights this fundamental nature of digital signals, emphasizing that they operate in a binary manner, easily interpretable by digital systems.