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Contiguous memory allocation having variable size partition suffers from:

1. External Fragmentation
2. Internal Fragmentation
3. Both External and Internal Fragmentation
4. None of the options

In variable Partitioning, space in main memory is allocated strictly according to the need of the process, hence there is no case of internal fragmentation. There will be no unused space left in the partition.

The absence of internal fragmentation doesn't mean that there will not be external fragmentation.

Let's consider three processes $P_{1} (2\: \text{MB})$ and $P_{2} (5\:\text{MB})$ and $P_{3} (2\:\text{MB})$ are being loaded in the respective partitions of the main memory.

After some time $P_{1}$ and $P_{3}$ got completed and their assigned space is freed. Now there are two unused partitions $(\text{2 MB and 2 MB})$ available in the main memory but they cannot be used to load a $4\:\text{MB}$ process in the memory since they are not contiguously located.

So, the correct answer is $(A).$

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