Swiss_boy and asdada1:
Thanks for shedding light.
Yes, GMATPrep review says, "sqrt(x^2) denotes the nonnegative square root of x^2, so sqrt(x^2) = |x|".
At the outset, I concluded that positve 1 is the only answer. But, negative 1 is also the answer: sqrt(x^2) / x = (+x or -x) / x = -1 or 1. Thus, the question cannot be answered conclusively.
However, choice E gives a conclusive answer.