The correct answer is B. Work with stakeholders to achieve consensus on risk thresholds.

Risk thresholds represent the specific levels of risk exposure or variation that stakeholders are willing to accept. Because thresholds are closely tied to stakeholder risk appetite, tolerance, project objectives, business priorities, and governance expectations, they should not be set by the project team alone. The risk manager should therefore work collaboratively with stakeholders to confirm and agree on those thresholds .

The question states that the team member is assessing and confirming thresholds using lessons learned from similar projects. Historical information is useful input, but thresholds for the current project must still be validated with the relevant stakeholders. In a complex, high-risk city-center construction project, many stakeholder interests may influence acceptable risk levels, including cost, schedule, safety, regulatory exposure, public disruption, and contractual obligations. For that reason, stakeholder consensus is the most appropriate action.

Why the other options are incorrect:

A. Develop risk assessment processes and tools to quantify risk thresholds Processes and tools may support analysis, but they do not themselves establish agreed thresholds. Thresholds must reflect stakeholder acceptance levels, not just analytical design.

C. Use subject matter experts and historical data to estimate risk thresholds This is useful supporting input, especially from past projects, but the question asks what the risk manager should do to assess and confirm the thresholds. Estimates from experts and history are not sufficient without stakeholder agreement.

D. Review regulatory requirements and the contract to identify risk thresholds Regulatory and contractual limits are important constraints, but they do not fully define project risk thresholds. Stakeholder tolerance may be narrower than legal or contractual boundaries.

Best-practice reasoning:

Risk thresholds should be established and validated during risk planning in consultation with key stakeholders because thresholds guide evaluation, prioritization, escalation, and response decisions. Without stakeholder agreement, the project may misjudge which risks are acceptable and which require action.

Reference-aligned basis:

This answer is consistent with standard risk management guidance that emphasizes:

risk thresholds are linked to stakeholder risk appetite and tolerance,

thresholds are established during planning,

stakeholder engagement is necessary to define and confirm acceptable levels of risk exposure.