When analyzing the exposures provided, all the contract values are positive. A netting framework (Option A) only reduces credit exposure when there is a mix of positive and negative exposures that can offset each other; hence, netting is ineffective here.

Selling a credit default swap (Option D) would assume more credit risk rather than mitigating it. The appropriate action would be to buy a CDS.

While increasing collateral (Option B) can reduce counterparty risk, it is often difficult and costly to negotiate, particularly with a highly rated entity (A-rated).

Using credit triggers (Option C), such as rating downgrade triggers, is a standard and highly appropriate technique for highly-rated counterparties. It allows the hedge fund to demand collateral or terminate the transactions if the counterparty's credit rating drops below a certain threshold, mitigating the risk without imposing an immediate drag on liquidity for the currently A-rated counterparty.