Cameron Diaz arrived at the Academy's Hollywood Costume lunch last week sporting a sparkling ring which initiated rumers about a possible engegement to bofriend Benji Madden.
Flaunting her ring, Diaz and Madden had dinner with friends at an Italian hot spot in Beverly Hills a source tells PEOPLE magazine.
"They arrived together with Benji driving. Cameron showed off her new ring and was smiling," the source says. "They enjoyed dinner for several hours."