Once a risk has been successfully managed, residual risks addressed, and there are no secondary risks, the next step according to risk management best practices is to formally close the expired risk and update all relevant project documentation. The PMBOK Guide states:
"Once the risk responses have been implemented, and the risk is no longer a threat or opportunity, the risk should be closed out in the risk register and the results should be documented as part of project records and lessons learned."
- PMBOK Guide, 6th Edition, Section 11.7.3.2
Closing the risk ensures transparency and supports organizational learning through updated project records.
References:
PMBOK Guide, 6th Edition, Section 11.7.3.2
Practice Standard for Project Risk Management, PMI, Section 6.7

The project manager should discuss the risk response strategies with the stakeholders to handle their expectations. This will help the project manager to align the risk responses with the stakeholder's risk appetite, preferences, and expectations. It will also help the project manager to obtain the stakeholder's support and approval for the risk responses. This is the best way to ensure clear visibility on the project risks and progress. Adding buffers to the schedule to accommodate risk (option A) is not a good practice, as it may create false expectations and hide the true impact of risk. Ensuring the risk register includes all identified risks (option B) is important, but it is not enough to handle stakeholder expectations. The project manager also needs to communicate the risk register to the stakeholders and discuss the risk responses with them.
Developing a communication plan to share updates on risks (option D) is also a good practice, but it is not sufficient to handle stakeholder expectations. The project manager also needs to involve the stakeholders in the risk response planning process and obtain their feedback and approval. References: PMI, The Standard for Risk Management in Portfolios, Programs, and Projects, 2019, p. 97; PMI, A Guide to the Project Management Body of Knowledge (PMBOK Guide), 6th ed., 2017, p. 407.
The project manager should develop a communication plan to share updates on risks (D) to handle stakeholder expectations, especially since the organization has a low risk appetite and stakeholders are very engaged. This approach ensures that stakeholders are regularly informed about the project's risks and progress, addressing their concerns and expectations. This is supported by the PMI's PMBOK Guide, Sixth Edition.