Answer: expect to earn excess returns.

**Explanation:** Information-motivated traders differ from pure investors primarily in their investment objectives and strategies: 1. **Pure investors** typically seek to earn a fair rate of return on their capital by investing in assets that match their risk tolerance and time horizon. They often hold well-diversified portfolios and may follow passive investment strategies. 2. **Information-motivated traders** actively seek to earn **excess returns** (returns above the market's required rate of return) by: - Identifying and exploiting mispriced securities - Using superior information or analysis - Timing the market - Engaging in active trading strategies **Why other options are incorrect:** - **A. pay lower transaction fees**: While some professional traders might have access to lower fees, this is not a defining characteristic that distinguishes information-motivated traders from pure investors. Both types of market participants can potentially access different fee structures. - **C. hold well-diversified portfolios**: Pure investors are actually more likely to hold well-diversified portfolios to reduce unsystematic risk. Information-motivated traders often concentrate their positions in securities they believe are mispriced, which may result in less diversified portfolios. The key distinction is that information-motivated traders actively seek to generate alpha (excess returns) through their trading activities, while pure investors typically accept market returns through diversified portfolios.

Author: LeetQuiz .