[MBS] how come CPR > 0.06 ?

CFA Level II
#1

Working on a quesiton in CFAI and it stated that the SMM is 0.9459% in month 42, find CPR. Then they go on and use the formula SMM = 1 - (1-CPR)^(1/12) and deduce CPR = 10.78%… but i thought CPR can be a maximum of 6% (if over 30 months). I am a bit confused about this… any takers? -Thanks.

#2

CPR * PSA

#3

u’re thinking of PSA 100…this is probably 250 PSA

#4

Your question is based on your assumtion that the security is prepaying at 100 PSA. This appears to not be the case.