Progressive Greenlight Checkup Practice Exam 2025 – All-in-One Guide to Exam Success!

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Which of the following statements about Regulation T is correct?

Regulation T is set by the SEC

Regulation T is set by the FRB

Regulation T is established by the Federal Reserve Board (FRB), which is responsible for formulating and regulating monetary policy. This regulation primarily governs the credit that can be extended by brokers and dealers to customers for the purchase of securities. It is important because it dictates the amount of margin that customers can use when buying securities on credit, thus influencing overall market operations and investor behavior.

This regulation does not pertain just to a specific subset of financial products such as mutual funds, nor is it determined by state law or set by the Securities and Exchange Commission (SEC). Instead, it provides a broad framework for credit transactions in the securities market. Understanding Regulation T is crucial for grasping how margin requirements work and how they can affect trading practices.

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Regulation T is only applicable to mutual funds

Regulation T is determined by state law

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