The annualized discount factor that is used to determine the price of a mortgage in the secondary markets includes

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The annualized discount factor used to determine the price of a mortgage in the secondary markets includes all of the above factors: the risk-free return, a risk premium, and a premium for the servicing costs of the mortgage. This is because investors in the secondary market are looking for a return that compensates for the risk they are taking on, which includes risks associated with default, prepayment, and servicing costs. Therefore, all of these factors are included when pricing a mortgage for sale in the secondary market.

The Annualized Discount Factor That Is Used to Determine the Price