Indeed, pljvaldez, but this hierarchy is based on the "x" (execute) permission bit of the directory.
Directory permissions are:
r => read the contents of the directory (ie the names of the files/subdirs)
w => add/remove files/subdirs
x => search: this allows you to try to access a subdirectory (with it's own permissions)
So, if you don't have x permission, you can't access the subdirectory.
Whenever you access a file / directory by specifying it's full path, all the parent directories (leading up to /) must have "x" bit set.
A hint: please be carefull when setting file/directory permissions, as they are vital to your computer's security.
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