Given below are the betas of a well-diversified portfolio on factor portfolios from a three-factor model and the risk premium on each of these factor portfolios. If the expected return on this portfolio is 12% based on your forecasts and the risk-free rate is 5%, determine whether an arbitrage opportunity exists and quantitatively outline the strategy you would use to expropriate it over a 1,000,000 trade.

	F1	F2	F3
Rp	.05	.04	.03
Beta	-.50	1.50	1.00

Please i want step by step solutions with formulas