Hi All,
Since everyone in this thread has correctly done the math involved in this prompt, I won't rehash any of that here. Instead, I want to point out that this question is based on math rules that you probably already know (Classic Quadratics, FOIL-ing and Reverse-FOIL-ing). The GMAT is a Test that is based heavily on patterns, and at the higher levels it will test you on patterns that you know, but in ways that you're probably not used to thinking about.
This question is based entirely on 2 Classic Quadratics:
General Format:
(Y+1)^2
and
(Y+1)(Y-1)
Spotting those patterns makes dealing with this question a fairly straight-forward process. When you come across questions that look 'strange', think about what they remind you of and you'll likely find the very pattern you need to answer the question correctly.
GMAT assassins aren't born, they're made,
Rich