Step 1: Use the by-product clue:
$\text{Mg(OH)Br}$ has bromine, so the Grignard reagent has bromine.
Step 2: Use the product clue:
The ketone has two phenyl groups, so the reagent carries a phenyl group. Only $\text{C}_6\text{H}_5\text{MgBr}$ meets both clues.
Final Answer:
The reagent is $\text{C}_6\text{H}_5\text{MgBr}$, option (D).
\[ \boxed{\text{C}_6\text{H}_5\text{MgBr}} \]