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I would like to ask, when calculating the outcome of an interest rate futures, do we take LIBOR+credit spread to calculate the actual borrowing costs, then only use this costs to minus profits gained from futures (or to add the losses incurred from futures) in getting the total costs to calculate the effective interest rate?
What if calculating the effective interest rate using the total borrowing costs that include only LIBOR in the calculation of actual borrowing costs? Acceptable?
The profit or loss on futures is calculated by comparing the futures price to Libor (not Libor + credit spread).
It will help you to watch the examples that are worked through in the free lectures on interest rate futures.