To set a password on your Word, Excel or PowerPoint file click:
File > Info > Protect Document > Encrypt with Password.
You’ll be prompted to create a password, then to confirm it. After you’ve added a password to your file you’ll want to be sure to save the file to make sure the password takes effect.
After you’ve added a password to your file, that password will need to be entered before anybody can open the file.
To remove the password open the file, which will require the current password, go to File > Protect Document > Encrypt with Password. Delete the password and click OK. Be sure to save your file to make that change permanent.