B. <u>Darl</u> is the answer!
Your question is incomplete because you have not provided the underlined pronoun. Thus, the complete sentence is the following:
Nathan told Nadir that <u>his</u> nerves would impact the horse's ability to carry them through the competition.
Answer:
Case: nominative
Reference: ambiguous
Sentence rewritten: After seeing that Nadir was nervous, Nathan told him that nerves would impact the horse's ability to carry them through the competition.
Explanation:
The possessive adjective his functions as nominative case because the noun phrase his nerves functions as the subject of a verb. Besides, it creates ambiguity because it is not clear whose nerves it refers to - Nathan or Nadir's. As a result, it is necessary to rewrite the sentence to clarify whose nerves affect the horse's performance.
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