  In the present paper we show that the Binomial-tree approach for pricing,
hedging, and risk assessment of Convertible bonds in the framework of the
Tsiveriotis-Fernandes model has serious drawbacks. Key words: Convertible
bonds, Binomial tree, Tsiveriotis-Fernandes model, Convertible bond pricing,
Convertible bond Greeks, Convertible Arbitrage, Delta-hedging of Convertible
bonds, Risk Assessment of Convertible bonds.
