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I have office 2007 and I couldn't find any type of security/ password ability..
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I have office 2010 while you have the word document open press F1 then search for "Password
Protected"
I got this from there.
Password protect a document
You can protect a document by using a password to help prevent unauthorized access.
1.Click the File tab.
2.Click Info.
3.Click Protect Document, and then click Encrypt with Password.
4.In the Encrypt Document box, type a password, and then click OK.
5.In the Confirm Password box, type the password again, and then click OK.
Notes
Passwords are case-sensitive. Make sure that the CAPS LOCK key is turned off when you enter a password for the first time.
If you lose or forget a password, Word cannot recover your data.