In a large measuring cup, combine the broth and water, then set aside. Keeping the liquid at room temperature makes it easier to incorporate gradually.

In a large saucepan over medium heat, melt the butter. Add chopped shallots and cook for about 2 minutes until softened.

Add Arborio rice and salt to the pan, stirring for another 2 minutes to coat the grains and lightly toast them.

Pour in the dry white wine, stirring continuously until most of the liquid has been absorbed.

Begin adding the broth mixture about ½ cup at a time, stirring continuously and letting each addition absorb before adding more. Continue this process until the rice is creamy and tender.

In a medium skillet over medium-high heat, heat olive oil. Add the sliced mushrooms and cook for 3–5 minutes until they start to brown.

Spoon the risotto into bowls and top each with a generous portion of the mushroom mixture. Finish with a sprinkle of parmesan and fresh parsley. Serve hot.