An investment advisor has access to a confidential report prepared by a respected securities analyst. under nasaa's statement of policy on unethical business practices, if he bases his recommendations to a client based on the information in this report:
a. he, as well as his client, could be guilty of violating the prohibition against insider trading
b. he must tell his clients that he has investment advice based on the analyst's report
c. he is acting unethically by using the report prepared by the analyst
d. he must compensate the securities analyst for the information if he receives any form of compensation for his investment advice based on the report

The correct answer is C.

Explanation:

As per NASAA'S statement of policy on unethical business practices an investment advisor is acting unethically by using the report prepared by analyst.

Background:

NASAA stands for North American Securities Administrators Association. NASAA is an association of state securities administrators whose  responsibility is to protect the consumers who purchase securities or investment advice. Its mission is protecting consumers who purchase securities or investment advice, and its jurisdiction extends to a wide variety of issuers and intermediaries who offer and sell securities to the public.

C. He is acting unethically by using the report prepared by the analyst

Explanation:

NASAA stands for NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION

According to the Statement on Policy and Unethical Business Practices, a broker-dealer or agent who engages in any practice that is deemed as unethical or dishonest may suffer suspension, denial, revocation of registration or any such action authorized by stature.

In answering the question, since the report is already tagged confidential (private, restricted or intended to keep secret), it will be unethical to use and as such using that information as the basis of recommendation to clients would be termed as unethical. The report should only be used for the intended private purpose.