Objects are organized in hierarchies and, by default, are set to inherit their security from their home folder. As shown in the figure below, in the Security tab of the wizard, the Inheriting settings from option is selected by default.
Setting security on a root folder propagates the security settings for all objects in the hierarchy. The security of all items, portfolios, their workbook objects, and data can be set in the root folder of the items and portfolios hierarchy.
Although an object may reside in multiple folders/portfolios, each object has only one set of permissions, (refer to Hierarchies Overview). This set of permissions is either defined specifically for the object and/or is inherited from its home folder/portfolio. By default, all new objects inherit their security setting from their home folder/portfolio.