Efficient market hypothesis
Efficient market hypothesis or EMH is a theory which states that all securities are fairly priced, and the price reflects (or it anticipates) the present, past and future information, both publicly and privately available in the market.
The theory requires information about factors affecting a security to be quickly made available.
Passive management of investments hinges on EMH and believes the markets are difficult to beat as information about a security is equally available to all, while active management believes in inefficient markets which belies information, and hence active human intervention can unlock alpha (ie. achieve abnormal returns) based on previously unknown information for leverage.