A junior risk analyst at a consulting firm is reviewing the operational arrangements of bilateral netting and central clearing of derivative trades. The analyst examines the following bilateral trades of three firms:

• Firm 1's exposure to Firm 2: AUD 90 million
• Firm 2's exposure to Firm 1: AUD 60 million
• Firm 1's exposure to Firm 3: AUD 12 million
• Firm 3's exposure to Firm 1: AUD 70 million
• Firm 2's exposure to Firm 3: AUD 57 million
• Firm 3's exposure to Firm 2: AUD 0 million

Which of the following statements is correct?