Some bond has a life of 4 periods, a spot yield of 5%, pays a coupon of $35 on each of the years (including at maturity), a face value of $800, and currently has a price of $1000.

a. What is the Macaulay duration of this bond?

b. Now suppose you have a liability stream with a Macaulay duration of 2 periods. If you wanted to immunize the portfolio and the only other bond has a Macaulay duration of 1.5, in what proportions should you hold these 2 stocks?