3. both are formed but there is a much higher yield of 2-bromobutane as opposed to 1-bromobutane. (98 % sure), need some clarification
This is correct; there will be a much higher yield of 2-bromobutane than 1-bromobutane (provided that the OP means but-1-ene when he talks about "butene").
What the major product is in hydohalogenation reactions such as this one is governed by something called "Markovnikov's Rule". This rule states that in electrophilic addition reactions involving HX adding over a double bond (where X is a halogen), the H will add to the carbon which already has the most hydrogens. I like to remember it as "the rich get richer" with respect to hydrogens in these types of addition reactions.
In this case, the terminal carbon of but-1-ene has hydrogens attached to it, whereas the second carbon only has one hydrogen attached to it (draw out the structure if you want to make it obvious). As a result, the hydrogen will attach itself to the terminal carbon, and the halogen (bromine, in this case) will attach itself to the second carbon. This will give you 2-bromobutane.
You don't have to know anything about the
why of this rule in VCE (actually, I don't think you need to know about the rule at all), but it has to do with the relative stability of intermediates in the reaction as it progresses.
Hope that helped! =)