Different codewords are formed using the letters

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Different codewords are formed using the letters of the word SYSTEMS. How many can such codewords be formed?

(1) The codewords must have four letters.
(2) In any codeword, the same letter may be selected as many times it has occurred in the word SYSTEMS.

Experts, the answer is C. However, if there is no limit as to how many letters the codeword can be (i.e., that it can be 1 letter, 2 letters, 3 letters, 4 letters, 5 letters, 6 letters, or 7 letters), we can still calculate a definite number of codewords. It's just that the number will be a lot bigger. Therefore, (2) in and of itself should be sufficient too.
Source: — Data Sufficiency |