why is the u s 3 month t bill used as the risk free rate 
there can never be a truly risk free rate because even the safest investments carry a very small amount of risk however the interest rate on a three month u s treasury bill is often used as the risk free rate for u s based investors this is a useful proxy because the market considers there to be virtually no chance of the u s government defaulting on its obligations the large size and deep liquidity of the market contribute to the perception of safety 