A student seeks your advice for the elaboration of a hedging strategy against interest rate risk. Three years from now, the student will need to make a one-off tuition payment of 17,000 for a postgraduate course and wonders how to invest cash available today to fund that future outflow. Suppose there are two liquid bonds in the market: Bond A: Face value = 100, current price = 85.48, no coupon payments, remaining life = 4 years Bond B: Face value = 100, current price life = 2 years 100, current price = 100, annual coupon of 4, remaining Assume all debt considered in this exercise has the same level of default risk. The benchmark yield curve for fixed-income investments of the same riskiness is flat at a level of 4% p.a. (a) Calculate the Macaulay Duration for bond A. (b) Calculate the Macaulay Duration for bond B. Explain the difference to the duration of a zero-coupon bond of the same maturity.