$y = x^2 - 2$
Step 1: The general equation of projectile motion is given by: \[ y = x \tan{\theta} - \frac{g x^2}{2 u^2 \cos^2{\theta}} \] Step 2: Given initial velocity components: \[ u_x = 1, \quad u_y = 1 \] Step 3: Using $\theta = 45^\circ$, $\tan{\theta} = 1$, and substituting values: \[ y = x - \frac{10x^2}{2(1)^2} \] \[ y = x - 5x^2 \] Step 4: Therefore, the correct answer is (C).