Which file format is best known for lossless compression and can support transparency and animation?

The choice that is best known for lossless compression and has the capability to support transparency and animation is GIF (Graphics Interchange Format). This format utilizes a compression method called Lempel-Ziv-Welch (LZW), which allows it to compress images without losing any data, making it a lossless format.

One of the key features of JPEG, for instance, is that it employs lossy compression, which means some image data is discarded for smaller file sizes, and it does not support animation or transparency. BMP (Bitmap) files typically involve larger file sizes as they do not use compression efficiently and lack support for transparency and animation. TIFF (Tagged Image File Format) is versatile for image quality and supports transparency, but it does not natively support animations in the same way GIF does.

Thus, GIF is the standout format among the options provided, recognized specifically for its ability to preserve image quality, accommodate transparency, and allow for simple animations.