The correct answer is E. A breach of trust is defined as any improper act or omission by a trustee contrary to the duties imposed on them by the terms of the trust. In this case, Laura's failure to invest the trust fund as stipulated by the trust instrument constitutes a breach of trust, making her personally liable to the beneficiaries for any resulting loss. Trustees must adhere to the investment obligations set out in the trust instrument and are personally accountable for any negligence in fulfilling these duties. 

Key Point: Trustees must adhere strictly to the terms of the trust instrument regarding investment duties. Negligent failure to do so constitutes a breach of trust, leading to personal liability for resulting losses.