Final answer:
Regulation T applies to securities transactions and governs the extension of credit by brokers and dealers for the purchase of securities such as stocks and bonds. It does not cover transactions involving commodities or real estate, which are regulated by other entities or laws.
Step-by-step explanation:
Regulation T does not govern the purchase of real estate. It applies to the purchase of securities such as stocks and bonds but does not cover commodities or real estate transactions. Regulation T is a set of provisions that are part of the Federal Reserve Board's regulations, and it is designed to provide control over the extension of credit by brokers and dealers. One of its principal aims is to control the amount of credit that can be used to purchase and carry securities, setting requirements for the amounts investors must deposit when buying securities on margin.
This regulation was established to limit the potential for excessive speculation and to reduce systemic risk within the stock market. Although Regulation T applies to stocks and bonds as they are securities, commodities and real estate fall outside of its purview because they are not considered securities. Commodities are usually regulated by other entities, such as the Commodity Futures Trading Commission (CFTC), while real estate transactions are typically overseen by state laws and other federal regulations specific to real estate financing.