The prospect theory of decision-making has been re-modeled for finance, specifically for portfolio selection. By replacing the original value function with a negative exponential one, the new model addresses various asset pricing puzzles and behavioral biases. This updated prospect theory can now explain the equity premium, value, and size puzzles, as well as the disposition effect in investing. It also allows for the existence of CAPM-equilibria with different types of investors. This revised approach combines prospect theory with traditional mean-variance portfolio theory to provide a more accurate framework for financial decision-making.