Official Explanation
Split #1: the comparison. Choice (A) has “P, like Q, ...”, which is correct. Choice (B) has “Like Q, P ...”, which is also correct. Choice (C) has “P is like Q”, which is wordy and less elegant, but correct. Choice (D) messes up the comparison, making the “asteroid belt” sound like an example of “small bodies” --- this is not correct. Choice (E) take the strategy of combining the contrast of the second half of the sentence with the statement of similarity at the beginning: the fundamental structure “Unlike Q, P...” is itself correct, but (E) tries to do too much, and the phrase “Unlike the asteroid belt composed of rock...” makes it sound as if there’s an other asteroid belt composed of something else, Swiss Cheese or something --- that’s totally illogical, so (E) does not handle the comparison correctly.
Split #2: the first half of the sentence is a statement of similarity, and the second half is a contrast. We need a strong contrast word. Choice (A) has “just as”, which is the exact opposite of a contrast word: this is problematic. Choice (B) has “but whereas”, very strong, and choice (D) has “but”, which is good. Choice (C) again takes a very wordy and inelegant tack for both parts, and joins them with the word “and”, not at all a strong contrast work. Choice (E) tries to do both the comparison and the contrast all at once, which is a sheer disaster.
Split #3: listing examples. The GMAT loves this one. Consider a situation in which a phrase ends with a category, and is followed by examples of that category. In colloquial speech, we use “like” ----- “ ... great baseball pitchers, like Tom Seaver and Dwight Gooden.” This may sound acceptable to your ear, but this is unacceptable on the GMAT. Instead of the word “like”, we need the words “such as” before a list of examples: “... great baseball pitchers, such as Tom Seaver and Dwight Gooden.” At the very end of the underlined section, choices (A) & (C) have “like” for a list of examples, so they are wrong. Choices (B) & (E) list examples with “such as”, which is the correct format.
After these three splits, (B) looks very good, but (D) may also look good. Let me talk a moment about the problems of (D). I’ve already mentioned the faulty comparison above. The modifier phrase “having remnants of the Solar System's formation” is both unclear and wrong. It is unclear with respect to its referent: what is this phrase trying to modify? It is wrong because it changes the meaning --- we want to say that both the asteroid belt and the Kuiper belt are composed of remnants of the Solar System's formation. Saying that one or both of them “has” remnants of the Solar System's formation implies that they have other things as well: this is the proper way to indicate the composition of something. For these reasons, (D) is wrong.
(B) is the only possible choice for a grammatically and logically correct answer.
FAQ: The correct answer choice contains "but whereas". That seems strange to me. Could you please explain more why that's grammatical?Sure! It's possible to have "but" and "whereas" together because they're serving two different functions. "But," preceded by a comma, links together two independent clauses.
It was raining. (But) We went out. -->
It was raining, but we went out.
Whereas is a "dependent clause marker". If a clause starts with "whereas," it must be joined with an independent clause.
Whereas my sister stayed home, I went out.
Any sentence can go in the place of an independent clause--even a sentence which already contains a dependent clause, like the one above.
It was raining, but [Independent Clause].
It was raining, but whereas my sister stayed home, I went out.
Now let's take a look at the sentence in the problem. If we split up that sentence in the same way, we get:
Like the asteroid belt, the Kuiper belt consists of small bodies, remnants of the Solar System's formation.
and
Whereas asteroids are made of rock, Kuiper belt objects are composed of "frozen volatiles," such as methane, ammonia, and water.
When combining them, "but" is just serving as the conjunction between these two complete sentences. And the second sentence just happens to begin with a dependent clause. Thus, "but" and "whereas" end up right next to each other, and that's completely fine.