When the current market rate is less than the bond contract rate on the date of issuance, the bond will be sold at a(n) .

When the current market rate is less than the bond contract rate on the date of issuance, the bond will be sold at a premium.

Here's why:

1. The bond contract rate, also known as the coupon rate, is the interest rate stated on the bond when it's issued. This rate determines the periodic interest payments that the bond issuer will make to the bondholder.

2. The market interest rate, on the other hand, is the current rate of interest on bonds of similar risk and maturity in the market. It fluctuates based on supply and demand for bonds in the market.

3. If the bond contract rate is higher than the market rate, it means that the bond is offering a higher interest payment than what is currently available in the market.

4. As a result, investors will be willing to pay more for this bond, causing it to be sold at a price higher than its face value. This is known as selling at a premium.