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Consider two annuities that both make annual payments and have the same yield. The first annuity is a level 3-year annuity-due and its Macaulay duration

Consider two annuities that both make annual payments and have the same yield. The first annuity is a level 3-year annuity-due and its Macaulay duration is 0.94. The second annuity is a level 4-year annuity-due.

(a) Will the Macaulay duration for the second annuity be larger or smaller than 0.94? Explain.

(b) Calculate the Macaulay duration for the second annuity.

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