Standard finance theory as defined by Thaler (1999) assumes that the “representative agent” acts rationally following the principles of Expected Utility Theory and making future predictions based on rational information. It is assumed that there is no element of cognitive bias or sentiment influencing asset prices (O'Keeffe, 2014). The expected utility theorem introduced by Bernoulli (1738) and further developed by Von Neumann and Morgenstern (1947) states that the "decision maker" bases their decision regarding "risky outcomes" exclusively on the expected return or "expected utility". , this recognizes the risk-averse nature of most market participants. This theory forms the basis for standard finance theory. People place greater weight on what they stand to gain or lose from an event than on the expected value of the event's outcome. Von Neumann and Morgenstern's (1947) theory of utility has four axioms of choice that must be present for the theory to be accurate. transitivity; which presupposes that people's choices are coherent, complete; which assumes that people have well-defined preferences, independence; which assumes that an individual's decision will not change despite the addition of irrelevant variables and, finally, convexity/continuity; which assumes that when there are several outcomes for which an individual has certain preferences, there should be one outcome to which the individual is indifferent. These axioms allow us to introduce risk aversion theory which suggests that utility functions are concave and show decreasing marginal wealth utility (O'Keeffe, 2014). Kahneman and Tversky (1979), however, believed that individuals showed greater tendencies to be “risk seeking” and to base their decisions on cognitive criteria… halfway through the paper… believes that, in the long run, mispricing or any perceived anomaly will be eradicated as the market corrects itself. However from the above it can be clearly seen that market participants are indeed susceptible to biases and make mistakes based on these biases. Therefore, herding and positive feedback trading do not allow the market to correct itself, and noise traders can influence market prices for prolonged periods. Conclusion Based on standard financial theory, noise traders should not exist in the market and their presence should not impact prices. However, they do and this can be attributed to the various aspects of behavioral finance outlined in this paper. Standard financial theory itself does not stand up to scrutiny in the face of the existence of anomalies and market participants who continually earn positive abnormal returns..