Liz is a successful USC graduate who accumulated $3 mil net worth after a decade of working in the field. She owns $2 mil of an actively traded mutual fund with a portfolio of 500 stocks. She also owns a bond index fund where her shares are worth $1 mil. The average returns for the stock portfolio and bond portfolio are 7% and 3% respectively.

Liz wants to know if she can generate higher return by capturing alpha and goes to her hedge fund friend for an advice. He tells her that he is invested in Snazzy Corp. Using French and Famas 3-factor model he projects alpha of 3%, Market Beta of 1, SMB (size) Beta of -.3 and HML (value) Beta of 1.5 for the next 12 months.

Construct an arbitrage strategy for Liz using this information. Use specific dollar weights for any securities you recommend.