What action establishes a many-to-many relationship between Entity A and Entity B?

Establishing a many-to-many relationship between two entities involves creating an intermediary entity that can link instances of both parent entities. In this case, choosing to add a new Entity C with two reference attributes is the correct approach.

Entity C acts as a junction or associative entity that contains references to both Entity A and Entity B. Each record in Entity C can link a specific instance of Entity A with a specific instance of Entity B, thus allowing for multiple instances of Entity A to relate to multiple instances of Entity B and vice versa. This configuration effectively captures the many-to-many relationship, as it allows for multiple connections between the two parent entities.

Other choices do not adequately represent the mechanics required for a many-to-many relationship. Simply setting the data type of an identifier in one entity or adding a reference attribute only to one of the entities creates a one-to-many relationship instead. Therefore, establishing the many-to-many relationship requires the creation of a distinct entity that serves as the intermediary, which is precisely what option C accomplishes.