The following graph plots the forward premium for a foreign currency along the horizontal axis, while measuring the interest rate differential (between a home country and a foreign country) along the vertical axis. ih refers to the interest rate in the home country, while if refers to the interest rate in foreign country. On the following graph, use the blue line (circle symbol) to plot the combinations of the forward premium and interest rate differential that are consistent with interest rate parity (IRP). The following graph shows the IRP line in blue along with several hypothetical points, A through E, that represent combinations of interest rate differentials and forward premiums