The spot rate between Japan and the U.S. is 104.02 yen=$1 while the 1 year forward rate is 105.13 yen = $1. A 1-year risk free security in the U.S. is yielding 4.2%. What is the rate of return on a 1-year risk-free security in Japan assuming that interest rate parity exists?

A.) 5.08%

B) 4.67%

c) 5.31%

D) 1.88%

E) 2.09%