As the 2008 housing bubble burst, home prices in the U.S. declined by 40% and over the same period the market index S&P 500 dropped by 50%. At present, with home prices higher than ever, the U.S. housing market is likely in an even larger housing bubble. Zillow Inc. tried to benefit from the prevailing trend of increasing home prices by buying and then quickly selling a large number of houses (a process known as flipping houses). So they created a new Artifical Intelligence algorithm to buy homes. The only problem was Zillow's "Artificial Intelligence" algorithm overpaid substantially to outbid other buyers in a red-hot housing market. Wall Street Analysts were happy as they valued Zillow based on the number of houses it was able to buy, but when it came to selling those houses Zillow actually reported a loss of $328 million in the last quarter from July 2021 to September 2021. Suppose Zillow bought $5 billion worth of houses on 1 July 2021 and reported a loss of $328 million on those houses on 30 September 2021 (after 3 months). The appropriate risk-free rate is 1.5% per annum, and market risk premium is 3.3% per annum. If Zillow's house portfolio gave the same return as one would expect based on the CAPM model, what was the fair price of the houses bought by Zillow on 1 July 2021? rol As the 2008 housing bubble burst, home prices in the U.S. declined by 40% and over the same period the market index S&P 500 dropped by 50%. At present, with home prices higher than ever, the U.S. housing market is likely in an even larger housing bubble. Zillow Inc. tried to benefit from the prevailing trend of increasing home prices by buying and then quickly selling a large number of houses (a process known as flipping houses). So they created a new Artifical Intelligence algorithm to buy homes. The only problem was Zillow's "Artificial Intelligence" algorithm overpaid substantially to outbid other buyers in a red-hot housing market. Wall Street Analysts were happy as they valued Zillow based on the number of houses it was able to buy, but when it came to selling those houses Zillow actually reported a loss of $328 million in the last quarter from July 2021 to September 2021. Suppose Zillow bought $5 billion worth of houses on 1 July 2021 and reported a loss of $328 million on those houses on 30 September 2021 (after 3 months). The appropriate risk-free rate is 1.5% per annum, and market risk premium is 3.3% per annum. If Zillow's house portfolio gave the same return as one would expect based on the CAPM model, what was the fair price of the houses bought by Zillow on 1 July 2021? rol