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Selecting that option will open the change or remove password dialogue box. Select the File menu and note that the Set Password option is now Change Password. To change or remove the password on a document you will first need to successfully open the document. Whereas an unprotected document icon looks like this. It would be better from a security standpoint if macOS did not leak this information by the use of different icons. Security is comprised of layers and while obscuring which files are protected is not a deep security measure by itself, it doesn’t help. This makes it very obvious which documents are password protected on your system. The icon for a password protected document changes to contain a lock icon. Note how the unprotected document in the right pane is readable.
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Both types of documents are opened in this screenshot.
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This suggests that adding a password to a document performs some level of encryption on the document beyond just adding a password. When it is password protected, the contents become unreadable. When a Pages document is not password protected, the contents of it are readable in any text editor. But, if the document is stolen or found elsewhere it could not be opened without the password. It’s probably not suitable if you want to prevent casual users of your computer from accessing the document. If you check the Remember this password in my keychain option, then users of your computer will not be prompted for the password when opening the document. Selecting the Set Password… option in the File menu opens up a dialogue box to set a password and, optionally, add it to the macOS keychain. All of those versions offer password protection in the same way. Sierra 10.12.1 comes with Pages 6.0.5, Keynote 7.0.5 and Numbers 4.0.5 as of time of writing. Pages, Presentation, and Numbers are the main office applications for macOS.
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