Are Cameron Diaz and Benji Madden engaged? That was the question on everyone's minds when the actress showed up at an event wearing a sparkly ring on her left hand. Oooh!

Diaz posed for pictures on the red carpet of the Academy's Hollywood Costume luncheon on Wednesday, Oct. 8, not bothering to hide her new sparkler from the cameras. According to PEOPLE, Diaz was "casually and constantly twirling her ponytail, showing off the ring and often playing with it" at the luncheon, an eyewitness claims.

Later that night, Diaz once again flaunted her ring while out at dinner with her beau and friends.

"Cameron showed off her new ring and was smiling," a source tells the magazine.

Check out a picture of her ring below, and tell us: Would you be excited if Cameron Diaz and Benji Madden were to tie the knot? Wouldn't Cameron Diaz and Nicole Richie be the most badass sisters-in-law ever?

Frederick M. Brown, Getty Images

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