The most ethical course of action the reporter could take is:
B. tell the editor-in-chief about her relationship to the pilot, and ask that the story be assigned to another reporter.
This option demonstrates transparency and maintains journalistic integrity. The reporter's familial connection to the individual being investigated creates a potential conflict of interest, and disclosing this relationship allows the news organization to handle the situation appropriately. Assigning the story to another reporter would help ensure an impartial investigation and reporting process.