Step 1: Recall the horseshoe vortex model.
The horseshoe vortex is an idealized vortex system used to represent the circulation around a finite wing.
It consists of
• a bound vortex along the wing span,
• two trailing vortices extending downstream from the wing tips.
Step 2: Identify its application.
The horseshoe vortex explains the aerodynamic effects caused by finite wing tips, including induced drag and downwash.
Hence,
\[
\boxed{\text{Finite wing tip effects}}
\]
is the correct answer.
Thus,
\[
\boxed{(B)}
\]
is the correct answer.