The Spot Rate Between Japan and the U

The spot rate between Japan and the U.S. is ¥100.37 = $1, while the 1-year forward rate is ¥99.97 = $1. A 1-year risk-free security in the U.S. is yielding 3.8 percent. What is the rate of return on a 1-year risk-free security in Japan assuming that interest rate parity exists?

A) 3.32 percent
B) 3.39 percent
C) 3.44 percent
D) 3.49 percent
E) 3.56 percent