If the CAPM explains deviations of the forward exchange rate from the expected future spot exchange rate, explain why one party involved in a forward contract would be willing to enter into a contract with an expected loss ...

If the party that is long in the forward market has an expected profit the p ...

If the CAPM explains deviations of the forward exchange rate from the expected future spot exchange rate,

Question:

If the CAPM explains deviations of the forward from the expected future spot explain why one party involved in a forward contract would be willing to enter into a contract with an expected loss.

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...