Expansion is the correct answer
It would better improve the paragraph because it has nothin to do with the rest of the paragraph. The paragraph seems to be about team sports and promoting it, while sentence 3 is about individual sports are better then team sports. So removing sentence three would better promote CO-ED team sports.
If you make you mr question more clear I can answer it :)
Usually, your third step is to hunt for clues like supporting details, vocabulary, dialogue. You will have to search through the specific passage and draw information based on the passage to make an inference.