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This video tutorial demonstrates how to annotate a Microsoft Word document by marking the text using methods such as circling, numbering, or making notes. To circle specific sections, access the annotation tools under the draw tab and select a tool like a pen, marker, or pencil. Another method is to box a certain section by highlighting the word and choosing outside borders from the home tab. To highlight text, select the highlight option from the font group in the home menu. These methods show how to effectively annotate in a Microsoft Word document.