Question: You bought this security at t = 0 when interest rates were 4%. It's now one year later and interest rates are 3% at all

You bought this security at t = 0 when interest rates were 4%. It's now one year later and interest rates are 3% at all maturities. You sell the security. What was the annualized HPR on this investment?

0 300 400 400 400 400 400 400 t=0 1 2 3 4 5 6 portfolio

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