Recall the product rule of combinatorics:
If you must make n independent decisions, and the numbers of choices for those decisions are k1, ... ,kn respectively, then the number of ways for me to make the decisions is k1*...*kn
If you have the same number of choices for all these decisions, say k choices for each, then the number of ways of making all decisions is kn
In your problem, you have four independent decisions, one for each bit. You have two choices for each, namely, a 0 or 1. Thus the number of ways is 24 = 16. Clearly each of these 16 possibilities yield a different possibility so there are 16 nybbles.