  In 'A Closed-Form Solution for Options with Stochastic Volatility with
Applications to Bond and Currency Options', Heston proposes a Stochastic
Volatility (SV) model with constant interest rate and derives a semi-explicit
valuation formula. Heston also describes, in general terms, how the model could
be extended to incorporate Stochastic Interest Rates (SIR). This paper is
devoted to the construction of an extension of Heston's SV model with a
particular stochastic bond model which, just increasing in one the number of
parameters, allows to incorporate SIR and to derive a semi-explicit formula for
option pricing.
