The ro - group is the nucleophile. think about which group in the alkyl halide (iodoethane) is the leaving group. keep in mind that the leaving group may be one atom or a group of atoms.

When Nucleophile (Alkoxide) reacts with Alkyl Halide (Substrate), Ether (product) is formed with the elimination of Leaving group (Iodide in this case).

This is SN² a nucleophilic substitution reaction which takes place in primary alkyl halides. Reaction is given as,