Final answer:
NTFS must be used to encrypt files and folders and set access permissions for files, offering features such as EFS and specific access controls.
Step-by-step explanation:
NTFS (New Technology File System) must be used to be able to encrypt files and folders and to set access permissions for files. NTFS is a file system introduced by Microsoft, and it includes support for file-level security, encryption, and large storage capacities. It is one of the preferred file systems for Windows operating systems.
Encryption with NTFS is made possible through a feature known as Encrypting File System (EFS). This feature allows users to encrypt individual files and folders, protecting sensitive data from unauthorized access.
Access permissions on NTFS enable administrators to set specific read, write, and execute permissions on files and folders, which is crucial for maintaining data security and integrity within an organization or for individual privacy.