A BD is a member of a selling syndicate in a firm commitment underwriting of a "hot" issue. The BD holds back 25% of its allotment for future sale at an expected higher price. This conduct by the BD is:

[B]

Explanation:

Based on the information provided within the question it can be said that this conduct by the BD is both unethical and not permitted under NASAA and USA's Uniform Securities Act Regulations. This is because a BD has the responsibility to make a bona fide public offering of the stock as soon as it is available. Holding onto that stock in order to later sell at a higher profit is referred to as "freeriding" and is illegal.