The premise of behavioural finance is that:

$1.$ conventional financial theory ignores how real people make decisions and that people make a difference

$2.$ conventional financial theoryy considers howo emotional people make decisions, but the market is driven b yrational utility$-$maximixing investors

$3.$ conventional financial theory yconsiders how emotional people make decisions, but the market is driven b yrational utilityy maximising investors and should ignore how the average person makes decisions because the market is driven by investors who are much more sophisticated than the average peson

$4.$ conventional financial theory should ignore hoow the average person makes decisions because the market is driven by investors whoo are much more sophisticated than the average person

$5.$ none are correct