Step 1: Use one combined shortcut for the height.
The bullet sticks in the block, so momentum is shared first, then the joined mass swings up turning its motion into height. Putting both ideas together gives \[ h = \frac{1}{2g}\left(\frac{m_1 v_1}{m_1+m_2}\right)^2 \]
Step 2: Put numbers in standard units.
Bullet mass $m_1 = 10\text{ g} = 0.01\text{ kg}$, bullet speed $v_1 = 400\text{ m/s}$, block mass $m_2 = 3.99\text{ kg}$, and $g=10\text{ m/s}^2$. The total mass is $0.01+3.99 = 4\text{ kg}$.
Step 3: Find the shared speed just after the hit.
\[ V = \frac{m_1 v_1}{m_1+m_2} = \frac{0.01\times 400}{4} = \frac{4}{4} = 1\text{ m/s} \]
Step 4: Turn that speed into rise height.
\[ h = \frac{V^2}{2g} = \frac{1^2}{2\times 10} = \frac{1}{20} = 0.05\text{ m} \]
So the block rises 0.05 m, which is option (C).
\[ \boxed{0.05\text{ m}} \]