In this article the evolution of modern finance theory based on rationality and EMH paradigms is explained. A number of empirical anomalies have been discovered in finance that is apparently in compatible with rational behavior and EMH. Behavioral finance argues that financial anomalies can be understood using models in which some agents are not fully rational. This survey reviews the theory, empirical challenges, and current evidence pertaining to each approach overall, the behavioral approaches help to explain a number of important anomalies and Different controversial views are collected as concluding remarks.