When a bond sells at a premium: Multiple Choice The contract rate is above the market rate. The contract rate is equal to the market rate. The contract rate is below the market rate. It means that the bond is a zero coupon bond. The bond pays no interest.

The contract rate is above the market rate.

Explanation:

In the case when the bond is sold at premium that means the market rate is lower than the coupon rate also the premium is declined when it reaches to the maturity level

So that means the contract rate is more than the market rate

hence, the first option is correct

And, the same should be considered and relevant

its kinda hard to answer this when we dont have all the information that we need.