Final answer:
Reg T of the Federal Reserve Board only applies to margin trading in stocks. It sets the minimum amount of cash that the investor must contribute towards the purchase of the stocks, known as the initial margin requirement.
Step-by-step explanation:
Reg T of the Federal Reserve Board only applies to margin trading in stocks. Margin trading is when an investor borrows money from a broker to buy stocks. Reg T sets the minimum amount of cash that the investor must contribute towards the purchase of the stocks, known as the initial margin requirement. This regulation helps to prevent excessive borrowing and promote stability in the stock market.