Final answer:
A coupon bond selling at a premium has a lower yield to maturity than the coupon rate, as it offers higher interest payments compared to current market rates, leading to a higher purchase price.
Step-by-step explanation:
All else constant, a coupon bond that is selling at a premium must have a lower yield to maturity than the coupon rate. This situation occurs when a bond's coupon rate is higher than the prevailing interest rates in the market. The value of the bond's interest payments is greater relative to new bonds, leading investors to pay more than the face value (premium) for these attractive rates. Thus, as the bond price increases, the yield to maturity decreases because the overall rate of return on the bond adjusts for the higher purchase price.