Initiate risperidone 0.25 mg daily at bedtime with planned titration to 0.5-1 mg based on response, as low-dose risperidone has evidence for late-life psychosis treatment

Monitor for extrapyramidal symptoms and metabolic changes at 2-week intervals. Plan to reassess psychotic symptoms using a standardized rating scale at 4 weeks and discuss risks and benefits of ongoing antipsychotic therapy with the patient and family. Risperidone is a D2 receptor antagonist that carries significant risk of worsening Parkinsonism and extrapyramidal symptoms in this patient who already has mild Parkinsonism and is taking carbidopa-levodopa. Even at low doses, risperidone's D2 blockade can exacerbate motor symptoms. An atypical antipsychotic with lower D2 affinity such as quetiapine would be more appropriate given the patient's comorbid Parkinsonism.

Initiate olanzapine 2.5 mg at bedtime given its efficacy for psychotic symptoms and sedating properties that may help with the patient's agitation and sleep disturbance

Plan to monitor fasting glucose and lipids at baseline and 4 weeks given her diabetes history. Titrate slowly to 5 mg if needed, and reassess psychotic symptoms and metabolic parameters at each follow-up visit. Olanzapine has significant metabolic side effects including weight gain, hyperglycemia, and dyslipidemia, making it a poor choice for a patient with type 2 diabetes. It also has anticholinergic properties that increase fall risk and cognitive impairment in older adults. Additionally, olanzapine carries moderate D2 blockade that can worsen Parkinsonism. The metabolic and motor risks make this an inappropriate selection for this patient.

Initiate haloperidol 0.5 mg daily, as it is a well-established antipsychotic with clear dosing guidelines for elderly patients and minimal metabolic impact

Plan to obtain a baseline ECG for QTc monitoring and reassess motor symptoms at 2 weeks. Titrate gradually based on symptom response and monitor for tardive dyskinesia using the AIMS assessment quarterly throughout the treatment course. Haloperidol is a high-potency typical antipsychotic with strong D2 antagonism that is highly likely to worsen Parkinsonism and cause extrapyramidal symptoms in this patient. First-generation antipsychotics are generally avoided in elderly patients with Parkinsonism due to the high risk of motor deterioration. An atypical agent with lower D2 affinity is essential for this clinical scenario to balance psychosis treatment with motor symptom preservation.

Initiate quetiapine 12.5 mg at bedtime with gradual titration to 25-75 mg based on clinical response, as quetiapine has low D2 affinity and is less likely to exacerbate Parkinsonism

Plan to monitor orthostatic blood pressure, fasting glucose, and sedation at 1- and 2-week follow-ups. Reassess psychotic symptoms at 4 weeks and coordinate with the patient's primary care provider regarding metabolic monitoring. Quetiapine is the most appropriate choice for this patient because its low D2 receptor affinity minimizes the risk of worsening Parkinsonism while still providing antipsychotic efficacy. Starting at a very low dose of 12.5 mg with slow titration is consistent with geriatric prescribing principles. Although quetiapine has some metabolic effects, they are more manageable than olanzapine's, and the motor safety profile makes it the preferred agent in the context of comorbid Parkinsonism.