Do you think that because of the costs of moving banknotes back to their country of circulation, buying foreign currency banknotes could sometimes be cheaper than buying bank drafts? Could there be a seasonal pattern in exchange rates for banknotes? 

[Hint:Think of what is involved in shipping US dollars arising from Americans visiting Canada in summer and Canadians visiting the US in winter.]

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The costs of moving banknotes back to their country of circulation can indeed impact the relative co... View the full answer