Have textbook writers really read all the literature in their bibliography? Currently I am reading a textbook (in financial mathematics), and the bibliography is just huge. Pages upon pages of books and articles and whatnot. I'm talking hundreds of sources.

Did the author really read all of those things during the course of writing the book? Is that normal? 

Or is it just something they think will be useful for students, i.e. a source they may know as popular in the field but haven't read themselves? For example, somebody in mathematics might now of books by Rudin and what topics they contain, without ever actually have read themselves, so they could use that as a source without having read it, i.e like this:


  for further information about functional analysis, see (Rudin, 2003) [1].
Yes, an author will presumably have read all the material, but not "in the preparation of the book". Typically, if you write a book, you already are in expert in the area and you have read, at one point or another, most of the seminal work in your field, so you don't need to read everything in detail again when writing the book.

I should also point out that "hundreds of sources" really isn't that much. I am a comparatively junior researcher, and my "standard bibtex file" which contains papers I regularly cite already contains multiple hundred entries (and of course I have read all of these at some point - not always in great depth, though).