Well, the options are all decent. Assuming a vote, this is how it would break down.

Option 1 - 25% of the vote. This offers the last 25 people a 100% survival rate.

Option 2 - 16.67% survival. Might get 2% of the vote, for the "suicide cult" crowd, those that believe misery loves company.

Option 3 - 20% survival chance per person. 73% of the vote, as the best option for the first 75 people.

Thus, correct, option 1 cannot be chosen (the lowest death rate that would make it an option would be 66 people, with option 2 and 3 being equally viable), and Option 3 should be.

However, this is an evil guy, and likely is NOT being honest. 10% survival chance guaranteed is better than a 20% by a guy who's likely just watching you twist in the wind before killing you.

The illusion maintained when a bad guy gives you a choice is that you have to take one of the choices offered. He sets the rules. In this instance, it's almost always better to make your own rules, and remove absolute control from the hand of the evil genius. As long as it's in the hands of someone who has no compunctions capturing and killing people for amusement and torture, then.. Well, would you trust such a person's restraint?