Under Federal Reserve Regulation T, a 90-day restriction applies to which of the following situations?

The correct answer highlights a significant provision under Regulation T that pertains to the trading of securities in a cash account. When a customer purchases a stock in a cash account, they are required to pay for the stock in full by the settlement date. If the customer fails to do so, Regulation T imposes a 90-day restriction on buying the same security in a cash account, which means they cannot make further purchases of that stock without paying in full until the restriction period has ended. This regulation aims to promote proper financing and investment discipline among traders.

Understanding this restriction emphasizes the importance of adhering to cash account rules to ensure compliance and timely settlement of trades. This provision is designed to prevent customers from effectively using a cash account as if it were a margin account, where they might take advantage of borrowed funds without the requisite coverage.