The following answers are incorrect:
"Backs up the files that been modified since the last full backup. It does not change the archive bit value." This is incorrect because this describes the differential backup process.
"Backs up all the data and changes the archive bit to 0." This is incorrect because this describes the full backup process.
Backs up all the data and changes the archive bit to 1. This is incorrect because this describes neither the full backup process, differential backup process, or the incremental backup process.
The following reference(s) were/was used to create this question:
All-in-One CISSP Exam Guide Fourth Edition by Shon Harris pages 801-802

An intranet provides more security and control than a public posting on the
Internet.
Source: KRUTZ, Ronald L. & VINES, Russel D., The CISSP Prep Guide: Mastering the
Ten Domains of Computer Security, 2001, John Wiley & Sons, Page 99.

"The security kernel is made up of hardware, software, and firmware components that fall within the TCB and implements and enforces the reference monitor concept. The security kernel mediates all access and functions between subjects and objects. The security kernel is the core of the TCB and is the most commonly used approach to building trusted computing systems. There are three main requirements of the security kernel:
It must provide isolation for the processes carrying out the reference monitor concept, and the processes must be tamperproof.
It must be invoked for every access attempt and must be impossible to circumvent. Thus, the security kernel must be implemented in a complete and foolproof way.
It must be small enough to be able to be tested and verified in a complete and comprehensive manner. These are the requirements of the reference monitor; therefore, they are the requirements of the components that provide and enforce the reference monitor concept-the security kernel." - Shon Harris, "CISSP All-in-One Exam Guide", 3rd Ed, p

Controlled Unclassified Information - Encryption of Data at Rest
In accordance with DoD policy, all unclassified DoD data that has not been approved for public release and is stored on mobile computing devices or removable storage media must be encrypted using commercially available encryption technology.