Explanation
Discretionary trading is a type of trading activity where the advisor makes investment decisions on behalf of the client without obtaining the client's prior consent for each transaction. Discretionary trading is only allowed if the client has signed a discretionary management agreement with the advisor and the advisor is registered as a portfolio manager. A limited authorization form (LAF) does not grant the advisor the authority to engage in discretionary trading. A LAF only allows the advisor to execute trades that are initiated by the client, such as pre-authorized contributions or withdrawals. Therefore, Khuyen has performed discretionary trading by switching Bao's funds without consulting him, which is a violation of her registrant responsibilities and ethical standards. References:
Canadian Investment Funds Course (CIFC) Study Guide, Chapter 2: The Sales Process, Section 2.4:
Ethics and Compliance, page 2-161
Discretionary Trading Definition - Investopedia2

Explanation
The Management Reports of Fund Performance (MRFP) are documents that provide information about a mutual fund's financial performance, portfolio composition, risk profile, and management expenses. The MRFP are prepared by the fund manager and filed with the securities regulators twice a year, for the semi-annual and annual periods. The MRFP are also made available to the investors on the fund manager's website or upon request. The MRFP include the following sections:
* Financial Highlights: This section summarizes the key financial data of the fund, such as net assets, net
* asset value per unit, total return, ratios and supplemental data.
* Past Performance: This section shows the historical returns of the fund over different time periods and compares them with a benchmark index or category average.
* Summary of Investment Portfolio: This section provides a breakdown of the fund's portfolio by asset class, sector, geographic region, and top holdings. It also shows how the portfolio has changed over the reporting period.
* Management Discussion of Fund Performance: This section explains the fund's investment objectives, strategies, and risks, and analyzes the factors that affected the fund's performance during the reporting period. It also discloses the fund's management expense ratio (MER), trading expense ratio (TER), and turnover rate.
* Financial Statements: This section presents the fund's statement of financial position, statement of comprehensive income, statement of changes in net assets attributable to holders of redeemable units, and statement of cash flows. It also includes notes to the financial statements that provide additional information and disclosures.
The MRFP would provide Beatrice with comprehensive information regarding the analysis of financial statements and fund management expenses as it relates to her current mutual fund investment.
References: Canadian Investment Funds Course, Chapter 6: Fund Operations and Regulations1