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This study provides evidence concerning the efficiency of index and options markets by comparing the number and size of violations of theoretical pricing relationships before and after the introduction of the Toronto Index Participation Units. Although pricing efficiency within options markets improves over the test period, the evidence does not support the hypothesis that a stock basket enhances the connection between stock and options market. The objectives of this study is to empirically investigate the efficiency of the market for the index options listed by the Toronto Stock Exchange. The bounds and relative pricing relationships examined are not dependent on an option pricing model, so no assumptions concerning the process underlying the stock price are required.