Multiplying a matrix by its transpose is possible when the dimensions align correctly; a 3x2 matrix can be multiplied by a 2x3 transpose, resulting in a 3x3 matrix. The key condition for matrix multiplication is that the number of columns in the first matrix must equal the number of rows in the second matrix. The resulting matrix from this multiplication will have a rank of at most 2. Conversely, multiplying a 2x3 matrix by a 3x2 transpose yields a 2x2 matrix, also with a maximum rank of 2. Understanding these properties is essential for matrix operations in linear algebra.