When dealing with suspected malicious activity involving obfuscated PowerShell scripts—especially when launched from Microsoft Word documents—behavioral analysis is the most critical next step. This approach helps in determining if the process chain is part of a known attack pattern, such as a phishing attempt using malicious macros that launch PowerShell for data exfiltration or payload download.

As highlighted in theCyberOps Technologies (CBRFIR) 300-215 study guide, understanding behavior and deobfuscating PowerShell scripts is an essential part of the forensic and incident response process. Specifically:

During the detection and analysis phase, if PowerShell is used with obfuscated or encoded commands, responders should investigate the intent and behavior of the command.

Deobfuscation allows analysts to see what the script is doing (e.g., downloading files, creating persistence mechanisms, or opening a reverse shell).

The guide states:

“For example, if the threat is malware, the compromised system should be immediately isolated and the malware should be placed in a sandbox or a detonation chamber to understand what it is trying to do”.

This confirms that understanding execution behavior (such as what the PowerShell script intends to perform) is key to uncovering indicators of compromise (IoCs).

Thus, option C—conducting a behavioral analysis and deobfuscating PowerShell—is the most critical and effective response at this stage.