Since both objects are travelling in opposite directions at the same speed but eventually colliding with each other hence it is obvious that they are travelling in a circle.
Now, this question is regarding the conversation of momentum - elastic / in elastic collision.
Assuming the balls are in a closed system(an assumption that is consistent in your syllabus,unless stated otherwise)as the ball collides, momentum is conserved but some of the energy might be lost due to the collision either through heat / sound.
Summary:
3 types of collision.
1st type: Elastic collision
- No loss in Kinetic Energy
- No loss in momentum
- Balls do not stick together
Example: Bouncing Basketball, the ball comes back to your hand at the same height.
2nd type: Inelastic collision
- Loss in kinetic energy, (heat energy when in contact)
- No loss in momentum
- Balls do not stick together
Example: Bomb explosion.
3rd type: Perfectly Inelastic collision
- Maximum amount of KE is loss
- No loss in momentum
- Balls stick together
Example: Ballistic Pendulum