  In this paper we address three main objections of behavioral finance to the
theory of rational finance, considered as anomalies the theory of rational
finance cannot explain: Predictability of asset returns, The Equity Premium,
(The Volatility Puzzle. We offer resolutions of those objections within the
rational finance. We do not claim that those are the only possible explanations
of the anomalies, but offer statistical models within the rational theory of
finance which can be used without relying on behavioral finance assumptions
when searching for explanations of those anomalies.
